On the daily chart below for XAUUSD, we can see that after the overnight flash spike the last week into the record 2076 high, the price got rejected and extended the fall as the NFP report surprised to the upside. The buyers leant on the red long period moving average and the 2000 psychological round level to push again to the upside and unwind the NFP spike.
Gold has been supported by a fall in real yields, a weak USD and the US debt ceiling drama, but the US CPI report today may kick in a deeper pullback. In fact, the market is expecting the Fed to pause in June and start cutting already in September, but a hot CPI should change those expectations. If we were to get a pullback, the likely target would be the 50% Fibonacci retracement level and the trendline.
XAUUSD technical analysis
On the 4 hour chart below, we can see that the whole upward move from the 1930 level to the 2076 high is diverging with the MACD. This is generally a sign of weakening momentum often followed by pullbacks or reversals. If the CPI comes in hot, we should see a deeper pullback towards the 1930 level where the buyers will be waiting leaning on the support zone defined by the trendline, the 50% Fibonacci retracement level and the previous swing level.
On the 1 hour chart below, we can see more closely the recent price action after the NFP report. The downward spike was completely erased yesterday with the price getting rejected exactly at the NFP release time and the 50% Fibonacci retracement level. The market has been printing higher highs and higher lows soon after the report and the last higher low is at the 2022 level.
If the price breaks below that level, the bias will switch again to the downside and the sellers would pile in and push the price towards a new lower low targeting the 1930 level. The buyers, on the other hand, will want to see the price breaking above the 2040 level to jump onboard and ride the likely rally towards the 2076 high.
