A busy day is building up for the two major economies of North America. Will the March NFP figure outperform February’s number? Economists think that it will be tough to beat the 313k number, so the expectation at the moment is 193k for the month of March.
Economists are scratching their heads and trying to guess if the new number will have the element of surprise like the last one did, where it beat expectations by +113k. This has been the highest increase since July 2016. The sectors that had the biggest increases were construction, manufacturing, mining, financial activities, retail, professional and business services.
On Wednesday, we had the awaited ADP non-farm employment change number, that came out 241k, which was better than the expected 208k, but still slightly lower than the previous one at 246k. Economists and traders use that number to try and somehow get an idea of what to expect before the NFP number comes out. If to follow that logic, then we might see a better than expected NFP figure, but still lower than last month’s.
The unemployment rate, overall, is expected to drop slightly from 4.1% to 4%. The average hourly earnings are also expected to perform better. The number that economists are predicting is 0.3%, which is 2 tenths of a percent higher than the last one.
Gold – Technical Outlook
Gold has been a victim of the Trade Wars this week as well. The commodity experienced huge volatility and fluctuations in price, due to instability on world’s geopolitical arena. Initially it seemed that gold was in high demand as a safe-haven asset, but then it was under selling pressure, because equities are getting back to normal and taking the centre stage. Such instability in the market makes trading difficult.
Looking at the shorter-term picture, we can see that gold is forming something like a triangle, from which we expect the price to make a move out of at some point in the near future. For now, we are quite neutral on gold and we are keeping a close eye on the potential breakout areas. We are also not dismissing the idea that the precious metal could continue coiling for a while.
On the downside, if gold manages to get closer to the bottom side of the aforementioned triangle, then a break below the 1321 could trigger further selling, with a potential to make a move towards the 1313 area or even lower to test the 1307 level again.
On the flipside, a move back up to the 1336 level could potentially interest the bulls again, and gold could make a move towards the 1340 or even test the upper side of the triangle. A break to the upside could open the path towards the 1348 level first and then, potentially to the 1357 area.
XAU/USD
