The price of gold had a tough day yesterday as it fell from the $1,900 level. The market tested three times in a row the same level, and, on its move lower, it broke the previous higher low. In technical terms, this is a bearish trend, and traders will likely try to sell on any bounce.
The move lower triggered some extensive weakness in the AUD/USD pair too, known as being directly correlated with the gold price. Later today, the Non-Farm Payrolls in the United States are the highlight of the trading week. The ADP number showed yesterday that the private sector rebounded nicely from the COVID-19 pandemic, and it is now time to see what the NFP shows.
As for the US dollar, it is unclear what its reaction would be on a better than expected NFP data. On the one hand, a stronger job market should be bullish for the dollar, as it shows ongoing economic recovery. On the other hand, the equity market has driven the price action in the last months, so if positive data triggers a bullish move on stocks, the dollar may dive again.
Gold Technical Analysis
The triple top was already confirmed as the price reached the measured move. A move back at $1,890 could be just what bears wait for. Bears might want to sell on such a move, with a stop at the recent high and a risk-reward ratio of 1:2.
Don’t miss a beat! Follow us on Telegram and Twitter.
Gold Price Forecast
Follow Mircea on Twitter.