XAU/USD Pullback to 1950 after NFP?

Nov 6, 2023

The price of gold is consolidating just below the $2,000 level at the beginning of the week on Monday. This comes as the United States Dollar (USD) and US Treasury bond yields are attempting to find stability in a market environment that is inclined towards risk-friendly sentiment. Gold has faced challenges staying above the $2,000 threshold on multiple occasions last week, finding demand at lower levels. An immediate support is available at the rising trendline, situated at $1,975. If this support is breached, the November low at $1,9769 may be revisited. Failing to hold above this level could lead to a test of the static support at $1,960, potentially opening the path to the psychological level of $1,954. On the upside, breaking and maintaining above the $2,000 level is crucial to initiate a significant uptrend. A strong resistance barrier is present around the multi-month high of $2,009, coinciding with a horizontal resistance. The next significant level for Gold buyers is near the mid-May high, around $2,020. The Unemployment Rate increased to 3.9% compared to the expectation of 3.8%. Asian markets are following the positive closing on Wall Street from last Friday, buoyed by optimistic remarks made by China's Premier Li Qiang over the weekend. Li reaffirmed China's commitment to maintaining its pace of opening up and sharing development opportunities with the world. However, the US Dollar is seeing a minor rebound in Asia on Monday, benefiting from a slight uptick in US Treasury bond yields as investors adjust their positions for the new week. Additionally, during the Asian session, the price broke a swing high at the level of 1987.50, which is leading the price towards a pullback in the direction of around 1950, where there is a significant horizontal support/resistance zone. In that area, it will be important to evaluate possible upward movements and potential market entries at M15/M5, considering that macroeconomic data is scarce this week, and a calmer market could still reveal surprises. Comment and leave a like, have a great start to the trading week, everyone, and greetings from Nicola, CEO of Forex48 Trading Academy.