XAU/USD Eyes $1,760 Following Sharp Decline On US Jobs Data

1. XAU/USD Eyes $1,760 Following
Sharp Decline On US Jobs Data
Gold Forecast

2. Points To Be Covered Today:
• Gold Fundamental Overview
• Gold Technical Outlook
• Gold Testing Bullish Commitments
• Technical Confluences Detector
• XAU/USD Eyes $1,750 On NFP-inspired USD Strength
• The US Dollar Index

3. Gold Fundamental Overview
• XAU/USD came under strong bearish pressure in American session.
• Nonfarm Payrolls in US rose more than expected in July.
• Additional losses are likely with a daily close below 100-day SMA.
• After spending the first half of the day moving sideways near $1,800, the
XAU/USD fell sharply in the early American session and was last seen trading
at its lowest level since early July at $1,174, losing 1.7% on a daily basis.

4. Gold Fundamental Overview - I
• Renewed USD strength following the impressive July jobs report from the US
seems to be weighing heavily on XAU/USD on Friday.
• The US Bureau of Labor Statistics announced that Nonfarm Payrolls (NFP) in
the US rose by 943,000 in July, compared to analysts' estimate of 870,000.
• Moreover, June's increase got revised up to 938,000 from 850,000 and
the Unemployment Rate declined to 5.4% from 5.9% in June.

5. Gold Fundamental Overview - II
• Reflecting the positive impact of the NFP data on the greenback, the US Dollar
Index advanced to its highest level in more than a week and was last seen gaining
0.38% on the day at 92.61.
• US Nonfarm Payrolls rise by 943,000 in July, USD extends rally.
• Commenting on the data, "with these figures, has the US economy made
"substantial further progress?
• That is the term the all-powerful Federal Reserve set for withdrawing stimulus.
• The answer seems to be positive," said FXStreet analyst Yohay Elam.
• "Prospects of fewer dollars printed mean a stronger greenback, while the specter of
rate hikes gives investors a cause for a pause when coming to stocks."

6. Gold Fundamental Overview - III

7. Gold Technical Outlook
• With this recent decline, the Relative Strength Index (RSI) indicator on the
daily chart dropped below 40 but continues to stay above 30, suggesting that there
is more room on the downside before XAU/USD become technically oversold.
• Furthermore, the pair remains on track to close below the 100-day SMA for the first
time since mid-June, reaffirming the bearish shift in the near-term technical outlook.
• On the downside, the initial resistance is located at $1,760 (static level). Below that
level, the next target could be seen at $1,750 (June 29 low).
• Resistances, on the other hand, are located at $1,800 (psychological level), $1,805
(100-day SMA) and $1,820 (200-day SMA).

8. Gold Technical Outlook - I

9. Gold Testing Bullish Commitments
• Gold is once again testing bullish commitments near $1800 levels,
down for the second straight day, in anticipation of sooner-than-
expected unwinding of the monetary policy support from the Fed.
• The Treasury yields have advanced on the Fed’s hawkish rhetoric,
driving the US dollar to weekly tops alongside.
• Having said that, gold price remains on track for the worst weekly
drop since mid-June.

10. US Labor Market
• The breach of the long-held SMA100 one-day support at $1805 has
provided that extra zest to gold sellers, as the focus now shifts
towards the crucial US NFP release due at 1230 GMT.
• The US labor market will set the tone for gold price in the coming
weeks, as it will offer fresh cues on the Fed’s next policy move,
especially after Vice Chair Richard Clarida said the central bank
could start tapering bond-buying this year.

11. Technical Confluences Detector
• The Technical Confluences Detector shows that gold has tested the $1797
support area, which is the convergence of the pivot point one-day S1 and the
previous day’s low.
• A firm break below the latter is needed to expose the previous week’s low of
$1793. The Fibonacci 61.8% one-month coincides at that level.
• Further south, the pivot point one-day S2 at $1789 could get tested.
• A sharp sell-off towards the pivot point one-day S3 at $1779 could be in the
offing should the bulls fail to resist above the latter.

12. Fibonacci ( Day , Week & Month )
• On the upside, immediate support is seen at $1803, the confluence of the
previous high four-hour and Fibonacci 23.6% one-day.
• The next relevant upside target is aligned at the intersection of the SMA100
one-day and Fibonacci 38.2% one-day at $1805.
• Acceptance above the $1809 powerful hurdle is critical to staging any
meaningful recovery in the near term.
• At that point, the Fibonacci 61.8% one-day, Fibonacci 61.8% one-week and
Fibonacci 38.2% one-month meet.

13. Here Is How It Looks On The Tool

14. US NFP To Confirm Death Cross For XAU/USD?
• “The greenback continues to hold the higher ground, in anticipation that a
stronger NFP report could add credence to the hawkish rhetoric by the Fed.
• In that case, investors could dump the non-yielding gold while stocks could
also take a beating amid worries over stimulus rollback.”
• “The risks remain to the downside for gold price amid a looming death cross
on the daily time frame. The 50-DMA is fast approaching the 200-DMA,
looking to pierce through the latter from above.”

15. US NFP To Confirm Death Cross For XAU/USD? - I
• “Immediate support is seen at the range lows around $1790, below which a
sell-off towards the multi-month lows of $1751 could be in the offing.”
• “Gold bulls need to recapture the previous support now resistance at 100-
DMA at $1805, above which the 21-DMA at $1810could test the bullish
commitments.”
• “Powerful resistance at the 50 and 200-DMAs confluence at $1819 could
emerge as a tough nut to crack for gold buyers.”

16. XAU/USD Eyes $1,750 On NFP-inspired USD Strength
• Gold broke out of its consolidation channel on Friday.
• Impressive July jobs report from the US opens the door for asset tapering.
• Additional losses toward $1,750 are likely as near-term technical outlook turns bearish.
• The XAU/USD pair started the week under modest selling pressure but struggled to gather bearish
momentum in the absence of significant fundamental drivers.
• After closing flat on Monday and Tuesday, gold climbed above $1,830 on Wednesday.
• Nonetheless, the renewed USD strength in the second half of the week forced the pair to, once
again, turn south.
• With the US labour market report showing impressive job gains in July, gold declined sharply and
touched its lowest level in more than a month at $1,758 on Friday before steadying around $1,760.

17. What Happened Last Week
• On Monday, the data from the US showed the economic activity in the
manufacturing sector continued to expand in July albeit at a softer pace than it
did in June with the ISM's Manufacturing PMI declining to 59.5 from 60.6.
• Further details of the publication revealed that the Prices Paid component,
which notched a record high of 92.1 in June, edged lower to 85.7.
• Nevertheless, this report was largely ignored by market participants and the
USD stayed relatively calm against its major rivals.

18. What Happened Last Week - I
• On Wednesday, the Automatic Data Processing (ADP) Research Institute
revealed that private sector employment rose by 330,000 in July.
• This reading missed the market expectation of 695,000 by a wide margin and
triggered a USD selloff, allowing XAU/USD to rise above $1,830.
• However, hawkish Fed commentary during the American trading hours
helped the greenback regain its strength and forced gold to erase its gains.

19. The US Dollar Index
• Following these remarks, the US Dollar Index rose to its highest level in more than
a week and caused gold to remain on the back foot.
• In the meantime, the ISM Services PMI improved to a new series-high of 64.1 in
July and Initial Jobless Claims declined by 14,000 to 385,000 in the week ending
July 31.
• Finally, the US Bureau of Labor Statistics announced on Friday that Nonfarm
Payrolls (NFP) rose by 943,000 in July, surpassing the market consensus of
870,000.
• The impressive jobs report confirmed the hawkish tilt in the Fed’s policy outlook and
provided a strong boost to the greenback. In turn, XAU/USD lost more than 2% in a
single day.

20. XAU/USD Eyes $1,760 Following
Sharp Decline On US Jobs Data
Gold Forecast

21. XAU/USD Eyes $1,760 Following
Sharp Decline On US Jobs Data
Gold Forecast