Daily Market Insights

 
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8/5/2017
XAU/USD

Gold looks to recover

The economy continued its growth in the labor markets, The April jobs report suggested some steady job growth, job market made some improvement with the household survey showing better growth as well. The unemployment rate continued to fall and now is currently at the lowest in recent times.

The President of Federal Reserve Bank of San Francisco John Williams mentioned that his view for three or four rate increases in 2017 hasn't changed, as the labor market suggests some signs of expanding beyond its sustainable rate and the economy is operating above potential. Fed officials left interest rates unchanged following their meeting last week, indicating they are satisfied with the results of first quarter and can’t change the view for them from raising rates still at least twice this year after a hike in March.

U.S. Commerce Secretary Wilbur Ross last week that threats of trade actions from Canadian officials are not good and will not influence final U.S. import duty. Trade tensions with the US, the decline in oil prices, and diverging interest rate differentials undermined the Canadian dollar.

The Commerce Department still needs to finalize its anti-subsidy findings and then come up with the final duties which shall also be affirmed by the U.S. International Trade Commission before any statement can be made.

Intraday bias in the XAU/USD made the pair bounce in the last session after testing 1229.88 barriers, and that makes the trading settle now at the support area that appears in the chart. Some consolidations would be seen, but the upside of the recovery should be limited by retracement of 1249.14 levels.

The pair remains bullish for the moment with the newfound support intact. The price action holding the support levels is holding the area on trend line with a rebound. The outlook stays bullish, and further rise is expected from current levels with the price action being bullish. The oscillators rising above 30.0 levels indicate the shift in momentum, hence the spot could test resistance at 1249.14 levels, though the 50EMA and 100SMA are below the price action. The pair looks for come correction from this level to shift the downward trend. This signals some sign of recovery.

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