The disappointing NFP report for July has led the dollar to give up its gains against gold. However, don’t get too excited in selling the dollar just yet. A quick look at the hourly time frame reveals a series of candlesticks which have formed just below the 100 SMA and the 50% Fibonacci retracement level. Stochastic also shows a bearish divergence, making higher highs while price is making lower highs.
This may mean that the dollar rally would soon resume. But be wary of a strong close above 1,300.00 as this could mean that XAU/USD is on its way up the charts!
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