XAUUSD 04-05-2018 Intra-day analysis.

Daily Forex Market Preview, 04/05/2018

The U.S. dollar was seen holding ground on Thursday albeit trading mixed. Economic data on the day included the UK’s services PMI. Data showed that services sector activity increased modestly from March’s 51.7 to 52.8.

In the Eurozone, the flash inflation estimates showed that headline inflation rebounded to 1.2% but this was below forecasts of a 1.3% increase. Core inflation rate eased further to 0.7%.

The ISM’s non-manufacturing PMI data showed that the index eased to 56.8 missing forecasts and down from March’s reading of 58.8

Looking ahead, the economic data for the day will see the nonfarm payrolls report standing out. Median forecast point to the U.S. unemployment rate potentially easing to 4.0% in the month of April. The number of jobs added during the month is expected to rebound from March’s 103k to 189k. Wage growth which also remains a key component is expected to show a 0.2% increase on a month over month basis. A better than expected report could potentially renew hawkish bets on the U.S. dollar.

Elsewhere, the Canadian Ivey PMI data is due to be released today. A number of Fed speeches are also lined up including Dudley, Williams and Quarles.

XAUUSD 04-05-2018 Intra-day analysis

XAUUSD (1312.88): Gold prices managed to breakout above the price level of 1311 – 1307. A close above this support level now suggests a potential upside move in prices. The resistance level of 1325.50 remains a key level for price action to test. In the near term, we expect gold prices to remain range bound within the current levels. The support at 1311 – 1307 is likely to hold the declines in the near term. However, in the event that this support level gives way, we could expect gold prices to drop toward the 1300 level of round number support.