Gold Price Forecast: XAU/USD balances above $1,740 as DXY extends downside, US NFP buzz

Gold prices have climbed above $1,740.00 comfortably amid weakness in the DXY.
Lower US NFP estimates and the downbeat US ISM New Orders Index are responsible for the DXY’s fall.
The US ISM New Orders Index reflects the forward demand by the households.

Sagar Dua FXStreet

Gold price (XAU/USD) is auctioning above the crucial support of $1,740.00. The precious metal has attracted bids as the US dollar index (DXY) has surrendered more than half of Wednesday’s gains. The DXY has tumbled on lower expectations for the US Nonfarm Payrolls (NFP) and the downbeat US ISM New Orders Index data released on Wednesday.

As per the market consensus, the US economy added 270k jobs in June, higher than the former release of 390k. However, the Unemployment Rate may remain stable at 3.6%. It is worth noting that lower additions to the labor market do not resemble a slowdown in the job market. The US employment level is optimal and has less room for more jobs. However, this might trim the confidence of the Federal Reserve (Fed) in announcing extreme restrictive policy measures.

The US ISM New Orders Index landed at 55.6, significantly lower than the estimates and the prior print of 62.1 and 57.6 respectively. The corresponding data reflects the forward demand by the households and eventually, the lower New Orders Index indicates lower demand ahead.

Gold technical analysis

At the lower timeframe, the gold prices are forming an Inverted Flag that signals a continuation of a bearish momentum after a rangebound phase. The downward sloping trendline plotted from $1,812.15 is acting as a barricade for the counter. The declining 200-period Simple Moving Average (SMA) at $1,787.75 adds to the downside filters. It is worth noting that the momentum oscillator, Relative Strength Index (RSI) (14) is displaying overbought signals. Also, the Moving Average Convergence Divergence (MACD) (12,29,9) is portraying exhaustion in the pullback move.

Gold intraday chart

XAU/USD

Overview
Today last price	1746.36
Today Daily Change	7.50
Today Daily Change %	0.43
Today daily open	1738.86

Trends
Daily SMA20	1821.18
Daily SMA50	1839.92
Daily SMA100	1888.8
Daily SMA200	1845.84

Levels
Previous Daily High	1772.97
Previous Daily Low	1732.27
Previous Weekly High	1841.05
Previous Weekly Low	1784.55
Previous Monthly High	1879.26
Previous Monthly Low	1802.79
Daily Fibonacci 38.2%	1747.82
Daily Fibonacci 61.8%	1757.42
Daily Pivot Point S1	1723.1
Daily Pivot Point S2	1707.33
Daily Pivot Point S3	1682.4
Daily Pivot Point R1	1763.8
Daily Pivot Point R2	1788.73
Daily Pivot Point R3	1804.5

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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