Gold Under Pressure – US NFP & Stronger Dollar in Play - Forex News by FX Leaders
Gold Under Pressure - US NFP & Stronger Dollar in Play

Gold Under Pressure – US NFP & Stronger Dollar in Play

Posted Monday, August 8, 2022 by
Skerdian Meta • 2 min read

The gold price has charted its territory in a narrow band of $1,771.60-1,776.30, while the US dollar index (DXY) braces for a bumpy ride after encountering roadblocks at 106.80. After the US Bureau of Labor Statistics published positive US Nonfarm Payrolls (NFP), the precious metal GOLD is consolidating before a sharp decline.

The US economy added 528k jobs in the labor market, well exceeding predictions of 250k and the previous announcement of 372k. This will help the Federal Reserve (Fed) raise interest rates without hesitation. The US economy’s growth rate is rock solid, and the surprisingly higher US NFP notwithstanding a pause in the hiring process by US corporations, would excite Fed policymakers who want to sound aggressive.

XAU/USD

Meanwhile, the US dollar index (DXY) has given up all of its intraday gains and has fallen below its opening price. Investors are currently anticipating the announcement of the US Consumer Price Index (CPI). The annual inflation rate is expected to stay lower at 8.7 percent, compared to the previous publication of 9.1 percent. As a result, oil prices remained negative in July, which could be the deciding factor in a considerable slippage in the price rise index.

The US-China spat over Taiwan is also keeping dollar buyers optimistic.

According to Reuters, China is planning regular military drills east of the Taiwan Strait median line. Nonetheless, the Foreign Ministry of the dragon nation said on Friday that they would censure US House of Representatives Speaker Nancy Pelosi for her travel to Taiwan.

Taiwan’s Defense Ministry, on the other hand, recorded 66 Chinese aircraft operating in the Taiwan Strait as of 5 p.m. local time on Sunday. Additionally, US Secretary of State Anthony Blinken stated that China’s provocative moves constituted a substantial escalation.

China’s trade figures for June were released over the weekend, with exports surging the most this year.

Nonetheless, the headline Trade Balance increased to $101.26B, compared to $90B projections and $97.94B. Exports climbed by 18 percent, compared to 15 percent expected and 17.9 percent prior, while imports decreased by 2.3 percent, compared to 3.7 percent expected and 1.0 percent prior. Given the dragon nation’s prominence as one of the world’s top gold consumers, stronger trade figures appeared to have recently tested the XAU/USD bears.

Gold Technical Outlook

The gold price has stopped falling at the bullish channel’s support line on the chart, and the EMA 50 has met this level to lend strength to it, while stochastic is now clearly positive.

As a result, we feel that the odds are suitable for the projected bullish trend to restart in the coming period, with the first key objective at 1802.80, pointing you that the continuance of the bullish wave is dependent on price stability above 1755.70.

Today’s trading range is likely between 1760.00 support and 1795.00 resistance.

Today’s projected trend: Bullish

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
Comments
5 1 vote
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments