Gold Poised for Correction After US Job Data

Gold inched lower on Friday, decreasing the price of the yellow metal to less than $1260.00 an ounce following some key economic releases. The technical bias remains bearish because of a lower low in the ongoing downside move.

XAU/USD Technical Analysis

As of this writing, the precious metal is being traded near $1259 an ounce. On the downside, a support may be noted around $1205, an immediate horizontal support ahead of $1200, a key horizontal support as well as psychological number and then $1180, another major horizontal support area.

On the upside, a hurdle can be noted near $1295, the high of the last major upside rally ahead of $1300, the psychological level as demonstrated with red color in the given below chart. A break and daily closing above the red mark shall trigger renewed buying interest, validating a rally towards the $1340 resistance zone. The technical bias shall remain bearish as long as the $1200 support area is intact.

US Jobless Claims

US Initial jobless claims increased to 244,000 in the week ending July 22nd from a revised 234,000 the previous week, which was originally reported as 233,000. This figure was above consensus expectations of around 240,000.

The four-week moving average was unchanged at 244,000.

Continuing claims in the week ending July 15th declined to 1.964mn from a revised 1.977mn the previous week and the reading has remained below 2.00mn for 14 successive weeks. The 4-week moving average rose to 1.964mn from 1.959mn previously and there has been a slight upward drift in continuing claims over the past few weeks.

Trade Idea

Considering the overall technical and fundamental outlook, selling the precious metal around current levels appears to be a good strategy in short to medium term.

 

usmanahmed7290@gmail.com'

Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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