Gold - 4 Hour Chart

Trading Gold on the U.S. Labor Market Data Today

Posted Friday, August 3, 2018 by
Arslan Butt • 1 min read

Eventually, the most awaited day of the month has come. I’m speaking about the US non-farm payroll data. Gold is trading bearish despite the ongoing trade war between U.S. and China, which is driving uncertainty to the market. The point of concern is whether positive NFP is already priced in. If yes, then how should we trade gold today?

Sentiment Analysis – Price In NFP

The U.S. dollar is supported since Wednesday, as the Automatic Data Processing, Inc. reported an employment change of 219K vs. 86K forecast. Due to the positive correlation between NFP and ADP, the market is expecting positive labor market reports today. Which is why we are heeding a bearish trend in gold on the back of sentiments analysis.

Looks like the investors are already pricing in the positive nonfarm payroll. Despite the trade war fears, investors are not triggering the safe-haven appeal.

Technically, gold is trading exactly as we forecast in FOMC Places Bearish Pressure on Gold – Can We Expect $1,197? At the moment, gold is facing a resistance near $1,212 along with a support near $1,207 (our first target). The price is holding below 50 – periods EMA, which is also signaling the bearish trend in gold.

Gold - 4 Hour Chart

Now the thing is, gold has entered the oversold region. The RSI and Stochastics are trading under 20, and the closing of a Doji candle on the 4- hour chart is fueling the bullish retracement.

Upon the violation of $1,207 gold prices are likely to move towards our next target level of $1,201.

Gold – XAU/USD – Trading Idea

Gold trading is highly depending on the NFP data. The better than expected figure may trigger further selling until $1,201, but only on the violation of $1,207. Whereas, I will be looking to stay bullish above $1,207 on negative NFP with a target $1,212. Good Luck!

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About the author

Arslan Butt is our Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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