On the daily chart below for
XAUUSD, we can see that after the overnight flash spike the last week into the
record 2076 high, the price got rejected and extended the fall as the NFP report surprised to the upside.
The buyers leant on the red long period moving
average and the 2000 psychological
round level to push again to the upside and unwind the NFP
spike.

Gold has been supported by a fall
in real yields, a weak USD and the US debt ceiling drama, but the US CPI report
today may kick in a deeper pullback. In fact, the market is expecting the Fed
to pause in June and start cutting already in September, but a hot CPI should
change those expectations. If we were to get a pullback, the likely target
would be the 50% Fibonacci
retracement level and the trendline.

XAUUSD technical analysis

On the 4 hour chart below, we can
see that the whole upward move from the 1930 level to the 2076 high is diverging with the MACD. This is generally a sign of
weakening momentum often followed by pullbacks or reversals. If the CPI comes
in hot, we should see a deeper pullback towards the 1930 level where the buyers
will be waiting leaning on the support zone defined by the trendline, the 50%
Fibonacci retracement level and the previous swing level.

On the 1 hour chart below, we can
see more closely the recent price action after the NFP report. The downward
spike was completely erased yesterday with the price getting rejected exactly
at the NFP release time and the 50% Fibonacci retracement level. The market has
been printing higher highs and higher lows soon after the report and the last
higher low is at the 2022 level.

If the price breaks below that
level, the bias will switch again to the downside and the sellers would pile in
and push the price towards a new lower low targeting the 1930 level. The
buyers, on the other hand, will want to see the price breaking above the 2040
level to jump onboard and ride the likely rally towards the 2076 high.

This article was written by ForexLive at www.forexlive.com.