Analysis Of The XAU/USD Pair: US Unemployment Data Expected On Friday

By RoboForex Analytical Department

Analysts anticipate that US unemployment data, scheduled for release on Friday, will indicate a decline in the unemployment rate. If this forecast proves inaccurate, it could serve as a significant stimulus for the weakening of the US dollar and the rise in prices of other assets, including precious metals. According to Crescat Capital, gold is currently "oversold", as it has been in the past five years.

Technical Analysis Of The XAU/USD Currency Pair

D1 Timeframe: The XAU/USD pair continues to hover around the 1929.14 level, with support not yet established after eight days. A higher daily low on Wednesday compared to Tuesday suggests the emergence of bullish sentiment and the potential for a slowdown in the downward movement.

H1 Timeframe: Speculative buying remains relevant within a temporary correction from 1827.74, with a target at 1857. Given the ongoing duration of the bearish trend, short positions along the trend are unlikely. Sales might be considered after a rebound from 1855 following a correction.

Scenario Insights

• Bullish: If the unemployment rate exceeds expectations, it could weaken the USD and act as a bullish catalyst for gold. Monitoring price behaviour around the 1855 and 1857 levels for potential breakouts is crucial to confirm further bullish runs.
• Bearish: If the employment data are positive, and other macroeconomic factors or Federal Reserve statements support a stronger USD, gold might face added selling pressure. It's crucial to observe whether the price remains below the 1827.74 level and continues its downward trajectory.

Risk And Trading Strategy

Regardless of the scenario, risk management should be a top priority in any trading strategy due to the potential for unexpected market shifts, particularly with high-impact economic data releases approaching. Ensure that stop-loss, take-profit levels, and position sizing align with your risk tolerance and avoid engaging in trades that could jeopardize a significant portion of your trading capital.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.