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Daily FX Brief, June 7 – Market Wrap- Trading Gold on U.S. NFP Today


The Greenback has been hit in previous weeks by the growing expectations for a U.S. rate cut ere year-end, as to grow China-U.S. trade war worries business confidence and growth. Recent remarks from Fed officials have also led to an easing in coming months.

On Friday, the U.S. dollar is set for it’s the worst week since March ahead of U.S. employment figures that are seen supporting odds of a U.S. interest rate cut, whereas, the euro keeps gains made following a less dovish than forecast central bank policy review.

Later in the global day, the U.S. nonfarm payrolls data for May is expected to show a decline in hiring. Retardation in the U.S. employment market was apparent in a worse-than-anticipated ADPEmployment Report published on Wednesday, which exposed private U.S. companies scored 27,000 jobs in May, the least monthly addition in more than 9 years.

What’s Nex on Economic Docket?

US Non-Farm Payrolls – 12:30 GM
The monthly U.S. jobs release does not trigger the identical volatility it used to have, but this time may be unconventional, as it serves a crucial fact to the all-important Fed ruling later this month.

The U.S. Federal Reserve may advise of a rate cut; however, if the labor market continues to be healthy, they may not do so. After a considerable gain of 263K positions in April, a return to regular — 180K — is on the boards. Wages are no less valuable. The monthly wage increase caries forecasts for 0.3.% versus 0.2% last time, whereas the yearly figure is anticipated to remain stable at 3.2%.

Canadian jobs: 12:30 GMT
In case, the U.S. had an outstanding April in its employment market, in Canada, it would be excellent. The number of occupied bounced by 106.5K, versus some 800K in the U.S. The jobless rate, persisted at 5.7%, a shock as well. A more modest expansion is feasible now.

Gold Beyond $1,350 – Trade Fears, Rate Cut Hopes

Gold prices trimmed higher, floating below the 15-week high scored in the previous session, boosted by trade war concerns and a potential U.S. rate cut. Gold is still bullish, despite that some trader locked in profits in bullion after a recent rally. Gold was up 0.3% to $1,333.58 per ounce, after hitting its highest level since Feb. 20 at $1,343.86 on Wednesday.

Trading Gold on U.S. NFP Today
Well, there’s a negative correlation between gold prices and the U.S. nonfarm payroll data. For instance, gold prices dip over influential labor market figures and gold surge over weaker dollar data. It’s mostly because better NFP figures attack bulls for dollar, making it stronger and ultimately gold becomes expensive for foreign investors. As a result, it’s demand dips.

Positive NFP – Potential Bearish Gold
Negative NFP – Potential Bullish Trend

The 78.6% retracement level of the April swing lows to recent swing high’s range has held as support. Bulls took the price up for an additional test of the prior day’s high. Bulls failed to score through the February high at 1347.11.

We have a significant level at 1,357.66 as being the is the 2014-2019 resistance line. 1392.55 was 2014 high. Gold is hitting the second top level around 1,345 and have closed a doji pattern, which is a sign of a potential bearish trend.

On the lower side, gold may find support around 1,318, which marks a 38.2% Fibonacci support area.

Support and Resistance
R3: 1370.53
R2: 1351.95
R1: 1341.15
Key Trading Level: 1333.37
S1: 1322.57
S2: 1314.79
S3: 1296.21

Gold – Trade Tips
Stay bearish below 1,336 and bullish over 1,336 with a 60 pips take profit on both sides. However, also do monitor the Nonfarm payroll figures to determine further trends on gold prices. All the best!


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