Gold price gained further traction for the 3rd day in a row as the US Dollar continued to experience more selling.
The XAUUSD pair should be in focus tomorrow as the last Non-farm Payroll (NFP) report for 2020 is released. On Wednesday, data from the ADP indicated that private sector hiring was slowing in the face of new lockdowns resulting from the 2nd wave of the US coronavirus epidemic. If the NFP turns up disappointing numbers, this will provide a stronger case for more stimulus from the US Congress, keeping the greenback firmly under more pressure.
Technical Levels to Watch
Gold price action on the XAUUSD daily chart shows a continuation of the rally from the 1764.73 low seen last Friday. With gold price clearing the 1821.93 price level conclusively, the next logical target is the key resistance at the 1850.78 price level.
A break above this area allows the gold price to move up to the 1881.99 price level, where the lower boundary of the resolved bearish flag is found.
Sellers would be looking for possible rally points at which they can initiate new selling positions. A break above 1881 makes this proposition more difficult, as it leaves the upper barrier’s interaction with 1918.68 as the next place of possibility for selling on rallies. A move past this level could invalidate the near-term selling bias on gold price and allow a further extension to 1940.15 and possibly 1954.77.
On the other hand, rejection at 1850.78, 1869.39, or 1881.99 could allow sellers to make a renewed push towards 1821.55, 1800.34, or last week’s low just above 1762.51. Tomorrow’s Non-Farm Payrolls could make the pathway clearer for gold traders.
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XAUUSD Daily Chart
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