Gold Price Moved In Bearish Zone Below $1,320?03 May, 2018 by Aayush Jindal in Market Analysis
- Gold price declined recently and broke a major support at $1,320 against the US Dollar.
- There is a key bearish trend line forming with resistance at $1,315 on the 4-hours chart of XAU/USD.
- The US ADP Employment Change in April 2018 was 204K, more than the forecast of 200K.
- Today, the US Initial Jobless Claims for the week ending April 28, 2018 will be released, which is forecasted to rise from 209K to 225K.
Gold Price Technical Analysis
There were further slides in gold price from the $1,335 resistance against the US Dollar. The price declined and broke a major support area near $1,320, which opened the doors for more losses.
The price traded close to the $1,300 level and a low was formed at $1,301. At the moment, the price is consolidating losses and it recently tested the 38.2% Fib retracement level of the last drop from the $1,325 high to $1,301 low.
However, there are many hurdles on the upside near the $1,315 and $1,320 levels. There is also a key bearish trend line forming with resistance at $1,315 on the 4-hours chart of XAU/USD.
The same trend line is close to the 50% Fib retracement level of the last drop from the $1,325 high to $1,301 low. Moreover, the previous support at $1,320 is likely to act as a resistance.
On the downside, the recent low of $1,301 and $1,300 are decent support levels. A break below $1,300 may perhaps push the price towards the $1,280 level.
Recently, the US ADP Employment Change report for April 2018 was released by the Automatic Data Processing, Inc. The market was looking for a rise of 200K jobs compared with the last 241K.
The actual result was better as the ADP Employment Change was 204K. The outcome was positive and commenting on the same, a chief economist of Moody’s Analytics, Mark Zandi, stated:
Despite rising trade tensions, more volatile financial markets, and poor weather, businesses are adding a robust more than 200,000 jobs per month. At this pace, unemployment will soon be in the threes, which is rarified and risky territory, as the economy threatens to overheat.
Overall, gold price may correct a few points higher, but it won’t be easy for buyers to push it above the $1,320 resistance.
Economic Releases to Watch Today
- Euro Zone CPI for April 2018 (YoY) (Prelim) – Forecast +1.3%, versus +1.3% previous.
- Euro Zone Core CPI for April 2018 (YoY) (Prelim) – Forecast +1.2%, versus +1.0% previous.
- US Services PMI for April 2018 – Forecast 54.4, versus 54.4 previous.
- US ISM Non-Manufacturing Index for April 2018 – Forecast 58.1, versus 58.8 previous.