Higher dollar sends Gold lower but finds support buyers
The stronger US jobs report sent gold lower in early NY trading - reaching the lowest trading level since March 19th. However, a lower channel support trend line held and the dollar peaked as well and started to correct. This has helped reverse some of the downside move.
Looking at the four-hour chart, the lower channel trend line was tested at the 1163.50 area. The low price extended a little below that level to 1162.66 before rebounding back higher. The low for Gold was reached 9;30 AM ET, which was the time the EURUSD, USDJPY, GBPUSD all bottomed. The dollar and gold were dancing the two-step with no toes being stepped on.
Looking at the 5 minute chart, the correction off of the low, has taken the pair briefly above the 50% retracement of the days trading range (see chart below). This suggests, that at least at the low levels, the market has a little more balance between buyers and sellers. Going into a weekend where there could be some anxiety from Greece, it makes sense for traders to lighten up a bit.
Going forward, however, if the dollar is able to keep it's bid (Feds Dudley speaks at 12:40 PM - it might be interesting to hear his take) and Greece gets off the front pages once again, that key trend line may come in play once again. In the meantime, traders might look to focus on the 1170.54 level for close resistance. Another move above, might find some further short squaring before the weekend.
