XAU/USD outlook: Gold price bounces on positive news but key barrier still holds; US labor data in focus

Slobodan Drvenica Windsor Brokers

Gold price jumped on Wednesday (up 2.2% until early US session) following another failure at strong $4000 support (metal failed to register clear break below this level in six consecutive attempts.

Weaker than expected US private sector employment data for June and comments from Fed Chair Warsh that inflation risks have eased, lifted metal’s price.

Fresh strength cracked $4100 zone, ceiling of near-term congestion (reinforced by falling 10DMA), with sustained break here needed to generate initial positive signal and start reviving bulls for potential stronger recovery.

Supportive fundamentals (markets await Thursday’s release of June NFP report) still conflict with predominantly bearish structure on daily chart (14-d momentum remains in negative territory / MAs in bearish configuration, with the latest formation of 55/200DMA bear-cross) that continues to provide headwinds to recovery attempts.

Another failure to clear $4100 zone pivots would keep the price within the range, though bullishly aligned while holding in the upper part of the range, as studies on hourly and 4h charts have improved).

All eyes are on June labor data, with disappointing NFP to further weigh on recovery, while better than expected numbers would add to developing positive signals for stronger bounce.

Res: 4115; 4184; 4200; 4268

Sup: 4023; 4000; 3960; 3942

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

GBP/USD slides below 1.3250 after failing to break through 23.6% Fibo

The GBP/USD pair meets with a fresh supply during the Asian session on Wednesday and moves away from a nearly two-week high around the 1.3275 region, touched the previous day. Spot prices currently trade around the 1.3235 zone, down 0.20% for the day, as traders look to speeches from Bank of England Governor Andrew Bailey and Federal Reserve Chair Kevin Warsh for a fresh impetus.

EUR/USD stays offered, breaks below 1.1400…again

EUR/USD adds to Tuesday’s slight losses and drops below the 1.1400 yardstick in the latter part of Wednesday’s NA session. The pair’s decline comes in response to the persistent recovery in the US Dollar, which seems to have met extra support following the cautious tone from Fed’s Warsh in his comments at the ECB Forum.

Gold recovers but sellers hold the grip

Gold keeps the bullish performance in place on Wednesday, although is now giving away part of its earlier advance past the $4,100 mark per troy ounce. The precious metal’s marked rebound comes despite the US Dollar’s bid bias, higher US Treasury yields across the curve and positive headlines from the Middle East.

A preview of NFP

The number is of much greater importance than usual as the Fed moves away from a forecasting framework and towards a current-data / rebuilding-credibility framework.

Crypto Today: Bitcoin, Ethereum, XRP stay under pressure as investors turn more risk-averse

The cryptocurrency market trades under intense headwinds on Wednesday, led by Bitcoin’s (BTC) deepening sell-off below $60,000. The Crypto King hovers above $58,000.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.