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Aayush Jindal

Key Highlights

  • Gold price started a fresh decline from well above $1,850.
  • A connecting bearish trend line is in place with resistance near $1,765 on the 4-hours chart.
  • The US ADP Employment increased 692K in June 2021, less than the last 886K.
  • The US ISM Manufacturing Index is likely to remain stable near 61.0 in June 2021.

Gold Price Technical Analysis

After a clear break below $1,850, gold price extended its decline against the US Dollar. The price broke the key $1,800 support zone to move further into a bearish zone.

The 4-hours chart of XAU/USD indicates that the price gained bearish momentum below $1,800. It even settled well below the $1,800 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

Finally, there was a break below the $1,765 support and the price test $1,750. It is now consolidating losses above the $1,750 level.

On the upside, an initial resistance is near the $1,765 level. There is also a connecting bearish trend line in place with resistance near $1,765 on the same chart. The first major resistance is near the $1,795 and $1,800 levels.

A close above $1,800 could open the doors for a fresh increase. If not, gold price remains at a risk of more downsides below $1,750 and $1,740.

Fundamentally, the US ADP Employment Change for June 2021 was released yesterday by the Automatic Data Processing, Inc. The market was looking for a change of 600K in June 2021.

The actual result was better than the forecast, as the US ADP Employment increased 692K. However, it was well below the last reading, which was also revised down from 978K to 886K.

Looking at EUR/USD and GBP/USD, both pairs are showing bearish signs below 1.1950 and 1.3950 respectively.

Economic Releases to Watch Today

  • Germany’s Manufacturing PMI for June 2021 - Forecast 64.9, versus 64.9 previous.
  • Euro Zone Manufacturing PMI June 2021 – Forecast 63.1, versus 63.1 previous.
  • UK Manufacturing PMI for June 2021 – Forecast 64.2, versus 64.2 previous.
  • US Initial Jobless Claims - Forecast 393K, versus 411K previous.
  • US Manufacturing PMI for June 2021 – Forecast 62.6, versus 62.6 previous.
  • US ISM Manufacturing Index for June 2021 – Forecast 61.0, versus 61.2 previous.