Gold Prices Trade in a Triangle Ahead of NFP
- Gold Traders Prepare for a Breakout Ahead of NFP
- Bullish Breakouts Begin Over $1,248.44
- SSI Reads Negative at -1.52
Gold Daily Chart
(Created using Marketscope 2.0 Charts)
Gold prices have remained relatively quiet this morning, and are currently range bound ahead of tomorrow’s NFP (Non-Farm Payrolls) data release. Tomorrow’s NFP announcement is set to provide volatility for a variety of US Dollar based pairs, and potentially create event risk for commodities. Current expectations for the event are set at 193k. It should be noted that last month’s release came in under expectations at 151k. This miss spurred an immediate selloff in the US Dollar, while also sending Gold prices higher.
Technically, Gold is currently consolidating in a symmetrical triangle as seen in the graph above. In the event of a bullish breakout, traders will first look for prices to rise above Tuesdays high at $1,248.44. At that point, traders may begin to target a new 2016 high above $1,263.37. Conversely, bearish breakouts begin under support found near 1,225.0. In this scenario, traders can potentially look for the beginning of a new downtrend after initially targeting the triangle low at $1,190.82.
Sentiment remains negative for Gold (Ticker XAU/USD) as SSI (Speculative Sentiment Index) is currently reading at -1.52. Even though sentiment has not reached an extreme, its current reading suggests further advances in the price of gold. In the event that the market does not breakout higher, traders would reasonably expect SSI to move back towards a more neutral value.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.