XAUUSD Trading Plan for 8th Oct NFP
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On 30th September, XAU made a big retracement from the low 1720s. It stopped just short of the historic 1765 level which has staged previous trend reversals. We are coming into October NFP week and the all important jobs figures will be released on Friday 8th October. Jerome Powell has previously stated that the conditions for taper are "all but met". Therefore, the NFP print just needs to be moderately good for a major sell off in XAU.
We are expecting some retracement from 1765 into the mid-1740s before price makes a move over the daily trendline resistance. We see 1777 as the target because it represents a 50% retracement between the 3rd September high and 29th September low. Our plan is to short XAU heavily from this area. We need to see the 10y treasury note yields continue to stay elevated and a moderately good to neutral NFP in order to take a big short position.
If we are correct in this analysis and the data agrees with our position, we expect that the 1720s support will not hold this time and XAU will plummet to 1711-1708 and continue on to test the 1680s were strong support awaits.
We are expecting some retracement from 1765 into the mid-1740s before price makes a move over the daily trendline resistance. We see 1777 as the target because it represents a 50% retracement between the 3rd September high and 29th September low. Our plan is to short XAU heavily from this area. We need to see the 10y treasury note yields continue to stay elevated and a moderately good to neutral NFP in order to take a big short position.
If we are correct in this analysis and the data agrees with our position, we expect that the 1720s support will not hold this time and XAU will plummet to 1711-1708 and continue on to test the 1680s were strong support awaits.
Note
After testing the 1747-1750 level 3 times and failing to close below, we can assume 1750 is now acting as a support for the price. A daily closing above 1765 puts our 1777 target in site for longs. We will watch for signs of reversal in this area closely.Note
Gold has been playing in the range of 1745-1770 all week with 1750 acting as support and 1765 acting as resistance for the most part. We are expecting big moves on NFP day. Given the solid US data posted all week and the consistently rising 10y T-bill yield we think this idea has a high chance of playing out.Let's see what the NFP print looks like. Assuming a neutral to moderately positive reading, we expect price to rally into the mid-1770s and sell off precipitously.
Note
In a complete shocker, the NFP headline figure was a big miss. The other employment data components were mostly positive but the 2nd condition (neutral to moderately positive NFP) for us to enter a short trade was not met. Therefore, we will not trade this result.For now we expect 1770-1765 to act as support. A daily close over 1785 will send us up to test 1800 before a correction down is likely.
Be on the look out for a stop hunt back down to the weekly low of 1745 as rejecting this level could represent a great buying opportunity short term.
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