Spot gold bulls cheer as they nearly claim the $1,800 target – U.S. jobs data approaches – Caution, bearish divergence viewed from the RSI

August 5, 2022 - 2 weeks ago

The bears quickly took the exit door Thursday as the bullish sentiment extended after sharply moving away from the $1,755 key (rejected) support and is now on target to claim its fame in gold at $1,800 after scoring its highest finish in a month.

Demand for safe havens interest returned Thursday as tension increased between China and Taiwan after news reports Beijing had fired missiles around the island as part of a “military drill.”

The move was viewed in retaliation for U.S. House of Representative Speaker Nancy Pelosi’s visit to Taiwan this week, which was opposed by China news wires revealed.

Later Friday, the U.S. Labour Department’s jobs report is expected to show whether employers kept hiring in July after 372,000 jobs were added in June, with the forecast currently holding at 250,000, and the unemployment rate is expected to hold steady at a historic low of 3.6%.

Based on the technical assessment, the Relative Strength Index (RSI) indicator 3-day lookback’ is positive; however, a bearish divergence is evident. The Moving Average Convergence Divergence (MACD) holds a positive signal. The ADX indicator supports a ranging market.

The topside target reached near $1,800-06 now puts a neutral short-term outlook in place.

Conversely, if a rejection is seen from there, then $1,755 would again be a point of interest to the bears. Reassess from there.