Bearish bias on the XAU/USD pair has been retained, following the better-than-expected outcome of the Non-Farm Payrolls report. Data released by the Bureau of Labor Statistics reveals that the non-farm employment change for February 2021 stood at 379K, which was better than the 197K that the markets had predicted, and also better than January’s number of 166K (an upward revision).
This number indicates that the state of the employment market in the United States is on the path to recovery, as predicted by analysts at Wells Fargo. Recall that yesterday, we had reported here that Wells Fargo was predicting a good NFP report, with the bank stating that the stall in the initial jobless claims was as a result of the capture of missed filings last month.
The stellar NFP report wraps up a week that has been good for the US Dollar, and also maintains the bearish bias on gold prices. The XAU/USD is currently up 0.44% on the day but bullish momentum is very weak and the downside could resume at any moment.
Technical Levels to Watch
The 1699.43 support level remains under threat, and a breakdown of this level sends gold prices below $1700. The initial target remains at 1687.60, which is the 61.8% Fibonacci retracement from the 11 March to 5 April 2020 swing move. Below this level, 1638.49 and 1600.70 remain viable targets.
On the flip side, any rallies towards 1719.13, 1741.01 or 1763.30 could be potential areas to initiate re-entry shorts, targeting the support areas mentioned above.
XAU/USD Daily Chart