Chapter 12 XAUUSD: Focus on the Performance of Non-farm Payrolls with Short-term Weakness（8.3）
Fundamentals
During the Asian session on Thursday (August 3), the spot gold price fluctuated upward, currently trading near 1937. Overnight, the number of U.S. ADP employment that is known as "small non-farm payrolls" exceeded expectations for the fourth consecutive month, with an increase of 324,000 in July, far exceeding market expectations of 189,000. The performance of the U.S. labor market remains strong. At the same time, Fitch Ratings downgraded the U.S. government's credit rating and announced that the debt issuance program greatly exceeded expectations. U.S. bond yields climbed again, hitting a nine-month high and driving the U.S. dollar index to move higher to 102.8. The gold price falls back under pressure. Due to the previous contradictory data between ADP and non-farm payrolls, Friday's non-farm payrolls data is more important. If it can continue to exceed expectations, the gold price may continue to fall to the bottom. In addition, you can pay attention to today's U.S. ISM services PMI, factory orders, and the number of weekly initial jobless claims. If these data continue to be strong, it will increase market bets on the Federal Reserve rate hike in September.
As for the data, the latest refinanced bond issuance totaled $103 billion, higher than the previous quarter's $96 billion, greatly exceeding market expectations. U.S. ADP employment in July greatly exceeded expectations by 324,000, compared with expectations of 190,000, nearly twice as much as expected, of which the service sector employment increased by 303,000 jobs.
Today's focuses are the U.S. ISM Services PMI, Factory Orders, Weekly Initial Jobless Claims, and Quarterly Non-farm Productivity and Unit Labor Costs Data.
Technical Analysis
In the daily chart, yesterday, there were two waves of gold trading. One wave is about the price out of the rebound in the support of 1945 with the highest level near 1955 in the Asian session; Another wave is about the price out of the decline in the bearish situation of the U.S. ADP data, wherein the second wave is larger. With the strong rise of the dollar and the impact of the market, the gold price fell below 1940 to the low of 1932, with a scale of more than 20 dollars. Although it fell on Wednesday, its trading may be not continuous. On Thursday, PMI and unemployment data will be released. The current position is also an intensive area of support, and you need to focus on the gains and losses. It closed for 2 consecutive bear candles weekly and was weaker technically, but the focus of the recent trading is more on the level of the data rather than the technic. Today's focus is unemployment data, and tomorrow's focus is non-farm payrolls data. If the non-farm payrolls data is bullish to the gold, the gold will once again reverse the current trend. As to the scale of the rebound, you need to see the falling rhythm of the dollar index. And if the non-farm payrolls data is bearish to the gold, there may not be too much space to retrace, for the continuous decline has overdrawn a certain space and the market has been to the previously expected support area of 1930. So, if the gold price retraces to 1919, or even 1900, the market will have a strong expectation on the Federal Reserve rate hike in September again. Technically, today's weakness of intraday prices is bearish, the below focuses are 1928 and 1919, and the above focuses are 1948 and 1954.
Intraday trading is to buy low and sell high within the range. Today, if the price rebounds to 1945, you can continue to go short in the short term. The stop loss is set at 1948, the first target of the take profit is set at 1935, and the remaining positions' target is set at 1930 after moving the stop loss to breakeven. Intraday retracement of the lower is set at 1928, and aggressive people can try to go long in the short term with small positions. The stop loss is strictly set at 1925, and the take profit is set at 1940.
Trading Recommendations
Trading direction: Long
Entry price: 1928
Target price: 1940
Stop loss: 1925
Support: 1932.000, 1925.000
Resistance: 1948.000, 1954.000
