[ad_1]
Gold (XAU/USD), USD Talking Points Ahead of NFP’s
Recommended by Tammy Da Costa
Get Your Free Gold Forecast
Gold Prices Surrender to Dollar Strength Ahead of NFP Report – Hawkish Fed Weighs on XAU/USD
Gold prices have pulled back from their recent high as rate expectations and recession risks continue to drive sentiment.
With the recent FOMC commentary reaffirming the Fed’s commitment to raise interest rates further, the US Dollar pared losses, limiting XAU/USD gains.
Visit DailyFX Education to Discover What Drives Gold Prices
Although the Federal Reserve dashed hopes of a near-term pivot at the November meeting, a tight labor market could support more restrictive tightening for the remainder of the year. As the probability of another 50-point basis hike at the next FOMC rises following the commentary, tomorrow’s high impact economic data will likely contribute to gold’s imminent move.
Recommended by Tammy Da Costa
How to Trade Gold
Gold (XAU/USD) Technical Analysis
However, with the hawkish narrative weighing on the safe-haven metal throughout last year, a rebound off the October low of 1618.3 helped cap the downward move.
After rising by 15.63% since then, XAU/USD reached a high of 1871.3 before surrendering a portion of recent gains.
With a potential shooting star formation appearing on the weekly chart, the 50% Fibonacci retracement of the 2022 move has formed an additional barrier of resistance at 1848.6.
*A shooting star formation occurs when a sharp rise is followed by a steep pullback resulting in a low-bodied candle and a long-wick which signifies an important zone of resistance. *
Gold (XAU/USD) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
If the candlestick pattern is validated by a close below the December 27 weekly high of 1841.9, it is possible for the upside move to remain under pressure.
Looking Ahead: Gold Technical Levels
From a shorter-term timeframe, the daily chart further highlights levels support and resistance levels that remain relevant to the precious metal.
If the non-farm payroll report beats expectations of 200k, XAU/USD may continue to decline driving prices towards the next level of support at the August 2022 high of 1824.
Gold (XAU/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
A move lower and the resurgence of USD strength could then pave the way for a sharper pullback driving gold prices back towards major psychological support of 1800 and a possible retest of 1780. As this level remans key for both the short and longer-term move, a move lower and an acceleration of bearish momentum could guide price action back towards 1750.
Trade Smarter – Sign up for the DailyFX Newsletter
Receive timely and compelling market commentary from the DailyFX team
Subscribe to Newsletter
— Written by Tammy Da Costa, Analyst at DailyFX
Contact and follow Tammy on Twitter: @Tams707
[ad_2]
Image and article originally from www.dailyfx.com. Read the original article here.