Gold price was seen struggling a lot against the US Dollar. It broke a major support area and looks poised for more losses approaching the US NFP release.
Gold Price Weekly Forecast – Can US NFP Bring More Losses?
· The US Dollar enjoyed good gains this week not only against the currencies, but also versus Gold.
· Gold price broke a major support area of $1290, and traded below $1260.
· There was a monster triangle pattern formed on the XAU/USD daily chart, which was broken during the recent break.
Gold Price Technical Analysis
Gold price suffered heavy losses this week versus the US Dollar, as it broke not only the $1300 handle, but also cleared the $1290-80 support zone. The recent break was crucial and the attached chart clearly shows that.
As we can see, there was a monster triangle pattern formed on the XAU/USD daily chart. The Gold sellers managed to break it to push the price as low as $1250. The price also moved below the 100-day simple moving average.
Lastly, the XAU/USD also broke the 50% Fib retracement level of the last wave from the $1199 low to $1375 high. We can say that the doors are now open for more losses in Gold price may be towards $1240.
Trade Idea – There can be two scenarios. First, the price may continue to trade lower. Second, there can be a minor correction, which can be seen as selling opportunity.
The US will witness a monster release today, which may impact Gold price. The US nonfarm payrolls figure will be reported by the US Department of Labor. The market is poised for good numbers (172K) in Sep 2016. If the result is as per the market expectation, then Gold price may come under further bearish pressure in the near term.
In China today, the Foreign Exchange Reserves report was released by the State Administration of Foreign Exchange. The forecast was lined up for ¥3.180T in Sep 2016, compared with August 2016. However, the outcome was a bit lower with a reading of ¥3.166T.
Overall, there is nothing going in favor of the Gold buyers at present, and it remains at a risk for the next few sessions.