On the daily chart below for XAUUSD, we can see that after some consolidation around the $2000 level, the price started to rally as the US Job Openings missed expectations. The market is sensitive to economic data that points to a recession and a deteriorating labour market is generally the last shoe to drop.
The Fed has also signalled a possible pause if the data keeps softening, but they may do more if it doesn’t. So, they are completely data dependent. This latest rally extended all the way up to the 2020 high at $2087 and it will be a “break it or make it” moment today for gold.
XAUUSD technical analysis
On the 4 hour chart below, we can see more closely the breakout from the range around the $2000 level caused by the US Job Openings miss. This latest rally is diverging with the MACD though and that’s generally a signal of weakening momentum often followed by pullbacks or reversals. Today will be an important day for gold because we have the US NFP report. If the data beats expectations, then we should see a selloff towards the trendline, but if the data misses, gold should make a new record high today.
On the 1 hour chart below, we can see that the price has bounced from the minor trendline yesterday but it couldn’t make a new high as the market is now in waiting mode for the NFP release. In this case, traders shouldn’t care too much about the technicals and the trendline breakout because the data is what will matter. On a miss, the price can rally, and the breakout can turn into a fakeout. So, it’s really important to watch the economic data especially when a report can be a gamechanger.
