Gold Poised for Correction After US Job Data

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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.

Gold Poised for Correction After US Job Data

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.

 

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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