Price on the daily price action chart of Gold/USD ( Symbol XAUUSD) has printed a large Bullish Engulfing Bar (BUEB) that is rejecting a key support level. This BUEB is engulfing an inside bar that had also formed when price moved lower and stalled at the daily support level after a large move lower.
As explained in the 5th May Daily Forex Market Commentary after price makes a large move either higher or lower like price has done on the daily chart here, it will often then stall and consolidate and that is what the inside bar was doing when it formed at the support level. Price will then build the required price action order flow and energy to make the next push.
This bullish engulfing bar is rejecting a solid daily support level and if price can break higher and confirm the engulfing bar by moving higher, then there is space to move into until the next major daily resistance. The momentum in this market has been strongly lower of late which is something to take into account if price does break higher. If price can make a break higher and moves into the overhead daily level, traders could then potentially start looking to make short trades from the resistance to trade with the lower momentum if bearish price action presents.
Traders need to take note that the Non Farm Payroll (NFP) announcement is due out today in the US. This is the one and only news event that traders need to worry about. Traders do not need to follow it and they don’t need to know what happens. All they need to know is that it happens on the first Friday of the month and when it is released price can go literally move 100’s of pips on some pairs in minutes regularly after NFP announcements and it can be like taking a lotto ticket. Opening trades into the NFP is generally not the wisest thing to do especially on pairs weighted to the US given that price can go either way after the announcement, so please keep this in mind today.
Gold Daily Chart
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