Forex Analysis & Reviews: GOLD Double Bottom Ahead NFP!
time 05.06.2020 08:23 AM
time Relevance up to, 06.06.2020 08:23 AM

The gold price is located in the buyer's territory, the outlook is still bullish ahead of the crucial US data. Gold is trading at $1,711 level and is fighting hard to stay above the $1,700 psychological level and to accumulate more bullish energy before it resumes its upside journey.

The US Non-Farm Employment Change is expected around -7,750K today, better versus the -20,537K in the previous month, but unfortunately, the Unemployment Rate could increase from 14.7% to 19.4% in May. The Average Hourly Earnings could grow by 1.0%. The figures will bring high volatility, the gold price could accelerate its rally if the readings come in worse than expected.

This image is no longer relevant

The price action has developed a potential Double Bottom on the H4 chart, but this pattern is far from being confirmed. Gold has found strong support right on the $1,700 level again, the false breakdown has attracted more buyers.

The price could come back towards the $1,700 level after the rejection from the PP ($1,720) level, another rejection or false breakdown below the $1,700 - $1,693 area will suggest buying. The potential double bottom pattern will be validated only after a valid breakout above the upper median line (UML) and above the $1,746 when the price makes another higher high.

Gold could develop a minor triangle as well in the short term, between the upper median line (UML) and the $1,700 - $1,693 area, a valid breakout from this potential pattern will give us a clear direction and a fresh trading signal.

  • GOLD Trading Tips

Gold is bullish as long as it stays above the $1,693 - $1,700 zone, a valid breakdown below this support area could send the price towards the median line (ML), the price could develop a broader corrective phase if the price reaches the median line (ML) and if it closes on it.

If the price stays above the $1,700 - $1,693 area and if it fails to approach and reach the median line (ML), another leg higher is expected. A larger increase will be validated by a valid breakout above the upper median line (UML) of the descending pitchfork and above the R1 ($1,746) level.

Long above the $1,746 level with near-term targets at R2 ($1,764), R3 ($1,790), and higher at the $1,800 psychological level. If you want to sell gold, maybe you should wait for a valid breakdown below the median line (ML) and below the $1,666 static support to be sure that the price will register a major drop towards $1,600, $1,555, and $1,484 levels.

Ralph Shedler,
Analytical expert of InstaForex
© 2007-2022
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
  • Ferrari from InstaForex
    Top up your account with at least $1,000
    join the contest and win Ferrari
    F8 Tributo
  • Chancy Deposit
    Deposit your account with $3,000 and win $1,000
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
  • 30% Bonus
    Receive a 30% bonus every time you top up your account

Recommended Stories

Breaking forecast for EUR/USD on 08.12.2022

The third estimate of the EU GDP for Q3 2022 came as a pleasant surprise. Therefore, the single European currency managed to regain its footing. Today the euro is expected

Dean Leo 08:06 2022-12-08 UTC+2

GBP/USD: Breaking forecast on December 7, 2022

Due to the empty macroeconomic calendar, the pound mostly moved horizontally yesterday. However, by the close of the North American session, it seemed that market participants had remembered that

Dean Leo 06:48 2022-12-07 UTC+2

Breaking forecast for EUR/USD on December 6, 2022

At first sight, the situation seems logical. The eurozone retail sales dropped, thus boosting the greenback. The indicator slumped by 2.7%, whereas economists had expected a decline of 2.2%. Even

Dean Leo 07:00 2022-12-06 UTC+2

Breaking forecast for GBP/USD on December 5, 2022

Judging by the US dollar depreciation, the market was waiting for both a decline in the unemployment rate and a jump in the number of new jobs in the non-farm

Dean Leo 06:41 2022-12-05 UTC+2

Breaking forecast for EUR/USD on December 2, 2022

The euro managed to climb above the 5-month high. However, the rise could hardly be explained by a decline in the eurozone unemployment rate to 6.5% from 6.6%. Economists

Dean Leo 07:02 2022-12-02 UTC+2

GBP/USD: Breaking forecast on December 1, 2022

Following the release of preliminary data on inflation in the eurozone, the dollar should have been strengthened significantly. Yet, those were its main competitors, the euro and the pound, that

Dean Leo 07:15 2022-12-01 UTC+2

Breaking forecast for EUR/USD on November 30, 2022

In November, the market was mainly driven by the expectations of possible changes in the ECB's and Fed's policies. At a particular moment, traders believed that the Fed would slacken

Dean Leo 07:08 2022-11-30 UTC+2

GBP/USD: Breaking forecast on November 29, 2022

The pound sterling decided not to wait for the release of macro data or other reasons for a correction. The currency has been on a losing streak since Monday mainly

Dean Leo 07:41 2022-11-29 UTC+2

EUR/USD: breaking forecast on November 28, 2022

Although the euro edged down on Friday, the market remained flat due to a day off in the United States. The euro went down despite a clearly overbought greenback

Dean Leo 06:36 2022-11-28 UTC+2

Gold: downside movement below 1,749

The price of gold dropped after its strong growth and now it stands right above the 1,749 key support. It's trading at 1,751 at the time of writing

Ralph Shedler 13:51 2022-11-25 UTC+2
Can't speak right now?
Ask your question in the chat.