Non-Farm Exceeds Expectations While Gold Remains Steady

The U.S. non-farm payrolls grew more than expected in November. Meanwhile, markets appeared to be sticking to the Federal Reserve’s 50 basis points hike message.

However, the greenback found support from the employment readings while the dollar index traded this morning right at 104. Gold started a steady week despite the strong economic data to trade 0.1% higher above $1,800 per ounce.

U.S. Dollar Index (USDX)

The dollar index was down 0.18% at 104.28 to record its lowest since June 28. The Fed is expected to increase policy rates by an additional 50 basis points at the meeting. The index fell 1.4% last week ending its worst month since 2010, due to increasing expectations that the Federal Reserve reduce the pace of its interest rate hikes.

On the hourly chart, the index broke below the critical support at 105.25 which led the chart to 104. However, the index does not have major support above 103.40 and 102.60. On the other hand, the daily chart shows a high probability to trade between 103.40 and 102.60.

Technical indicators show a speculative trend around the current levels while it confirms the decline on the daily chart.

Pivot Point: 104.35

Chinese Yuan (USDCNH)

More Chinese cities, including financial hub Shanghai and Urumqi in the far west, announced an easing of coronavirus curbs over the weekend as China tries to soften its stance on COVID-19 restrictions in the wake of unprecedented protests against the policy. The onshore yuan jumped roughly 1.4% to as high as 6.9507 this morning to record its strongest since September 13.

Technically, the pair remains under pressure and is heading to break below the support at 6.95. However, both the daily and the hourly charts do not show notable signals of a rebound as technical indicators show increasing selling pressure.

Pivot Point: 6.9500

Spot Gold (XAUUSD)

Gold started a steady week despite the strong economic data which indicates more potential interest rate hikes. The U.S. nonfarm payrolls grew more than expected in November, but markets seemed to be sticking to the Fed’s vision for a slower hike pace in the coming months. Spot gold rose 0.1% to $1,800.10 an ounce, while gold futures rose 0.2% to $1,813.40 an ounce.

Spot gold found support above $1,795 pre-ounce but shows fluctuations on the hourly chart around $1,800 which most likely will not affect the overall uptrend.

The 4 hours and the daily chart show a high probability of continuing the uptrend despite the readings of the technical indicators. However, RSI and MACD show a probability of a slight drop to $1,795 per ounce.

Pivot Point: $1,800

West Texas Crude (USOUSD)

Oil prices rose as much as 2% on Monday after OPEC+ maintained their output targets steady ahead of a European Union ban. At the same time, in a positive sign for fuel demand, more Chinese cities eased COVID-19 curbs over the weekend, though a patchwork easing in policies sowed confusion across the country on Monday.

Brent crude futures were last up 0.8% to $86.29 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 0.9% to $80.68 a barrel.

WTI chart shows an indecisive trend on the hourly chart which opens an opportunity of fluctuations between $80 and $83 per barrel. However, the daily chart shows a continuation to the downtrend targeting $77 per barrel.

Pivot Point: 80.40