Gold is under pressure again as the bulls continue to buy the US dollar. Meanwhile, NFP data will keep the Fed back in the fight against inflation. According to technical analyst Ross J Burland, the yellow metal will likely experience a significant drop in the coming days after the US CPI. We have prepared Ross J Burland’s graphic analysis for our readers.
“US data calendar will be critical for days ahead”
cryptocoin.comAs you can follow, gold closed Friday with a decline after the US September Non-Farm Payrolls report, which exceeded expectations. Yellow metal started the new week with a sharp decline. Thus, it gave back a significant portion of last week’s gains.
This goes against the wars of restoring the supply-demand balance in the labor market in the face of inflation. This therefore means that strong rate hikes are for the foreseeable future. Also, a headwind for gold prices against a flattening curve. Many US data calendar events, including the minutes of the previous Fed meeting, US inflation data and Retail Sales, will be critical for the days ahead.
In Asia, the US dollar index (DXY) opened 0.5% higher than last week. The precious metal price continues its decline on Friday. Also, there is still room for an ongoing bearish correction in a strong US dollar environment.
Gold price analysis with charts
The following is the same daily chart but zoomed in. The price is correcting the dominant downtrend, as illustrated in Charts-1,2 and 3. Thus, the previous slipped outside the dynamic trendline resistance at the end of August. The harmonic crab pattern is bullish.
However, the price remains in corrective zones above the recent $1,614 and $1,659 daily lows.
Also, the price is facing resistance near $1,730, as the latest drawing in the daily chart sequences shows. Therefore, it is in the process of correcting towards an area of price imbalance between Friday’s lows of $1,690 and $1,675.
The second is close to the average 50% return of the daily bullish impulse. This is a critical area of interest for the week ahead, maintaining a move to the rest of the prevailing counter trendline and the aforementioned recent daily lows.
As shown on the hourly chart, gold is consolidating below the opposite trendline and has started to break out of the support area. Therefore, it shows that gold is on the right path to the mentioned price imbalance. If the US dollar bulls take action at the beginning of the week, a quick move is possible to ease the price imbalance. This is also likely to drop last week’s high at $1,675 and support below $1,659 daily.
Looking at the other 15-minute charts, there is a potential bullish scenario where the price has meanwhile gone beyond a trendline resistance. However, the dominant hourly trendline is likely to hold bullish attempts below $1,700 in the opening sessions of the week.
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