Morning Brief, Nov 2: US NFP vs. Gold – What to Expect from the Market Today?

Posted Friday, November 2, 2018 by
Arslan Butt • 2 min read
  • The precious metal GOLD soared nearly 2%, bouncing off three-month low.
  • The dollar index plunged 0.9% to 96.375 against a basket of six major currencies, weighed down by rallying in Sterling.
  • Investor focus will remain on the US NFP (Non-farm employment change) and unemployment rate.
  • Trading gold on the NFP news today
  • Top events to watch today

US Dollar – USD

The NFP (Nonfarm employment change) and the unemployment rate, both these economic events will be closely monitored at 12:30 (GMT). Looking at the forecast, the NFP is expected to be rise by 194K vs 134K during the previous month. On Wednesday, the ADP figure came out better than the forecast and due to its positive correlation with the NFP, investors are expecting the same kind of news from the NFP.

What we can expect from the NFP today?
It appears like the Greenback is less likely to strengthen on the news release (194k forecast) as most of it is already priced in. In fact, better than a 194K figure can fuel the bullish trend in the dollar. On the other hand, investors are expecting no change in the unemployment which is likely to remain at 3.7%.

Average Hourly Earnings m/m – In addition to the nonfarm payroll and unemployment rate, we need to focus on the average hourly earnings as well. In October, the earnings picked up to 0.3%, signaling a growth in the labor market but economists aren’t much optimistic about this month’s report. The figures are expected to drop to 0.2% from 0.3%.

 

 GOLD – XAU/USD- Trading Sideways Range

On Thursday, our forex trading signals on gold did pretty well and we managed to grab green pips by selling and buying throughout the day.

The bullion market continued with its bullish trend over weakness in the dollar. Most of the bearish trend initiated after the Bank of England kept interest rates steady on Thursday and hinted at slightly faster future rate rises if Brexit goes smoothly.


For the moment, you can see a tug of war between bulls and bears. The market is likely to trade in the same range of $1,210 – $1,237 until the release of labor market figures.

Gold – XAU/USD – Trading Levels

Support      Resistance
1221.55        1241.42
1209.63       1249.37
1189.76        1269.24
Key Trading Level: 1229.5

Gold// XAUUSD – Trading Idea

The idea is to stay bullish above $1,228 with a stop loss below $1,225 and a take profit of $1,235. The bullish breakout can lead the market towards $1,239.

Good luck and trade with care. Have an awesome weekend!

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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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