Gold, Bond Yield, US Dollar Technical Analysis Ahead of Key US Jobs Data

The US dollar index (DXY) shows bearish momentum as it retreats from the resistance near 107. Mixed economic data, including higher-than-expected jobless claims and a narrowing trade deficit, added uncertainty to market sentiment. While the US Treasury yield remains near support levels, its flat trajectory reflects cautious investor sentiment ahead of key Nonfarm data release. Fed Chair Jerome Powell’s recent remarks highlighted the economy’s strength, suggesting a careful approach to monetary policy. This stance kept expectations for a December rate cut muted. Traders are now awaiting the upcoming Nonfarm Payrolls report for further clarity.

Gold (XAU) prices consolidate within tight ranges following the release of US jobless claims data. Reduced bets on a Federal Reserve rate cut in December also contributed to the consolidation. Despite earlier rebounds, bullion remains under pressure as thin liquidity and consolidation dominate market dynamics in December.

The market expects the upcoming US Nonfarm Payrolls (NFP) report to show 218,000 new jobs in November, a sharp rise from October’s modest 12,000 gain. Hurricanes Helene and Milton and widespread industrial action impacted October’s figures. The Bureau of Labor Statistics estimates that around 40,000 striking workers resumed employment in November. Some economists project even higher gains, estimating 50,000-60,000 jobs from storm recovery, contributing to forecasts of 200,000-250,000 new positions. Strike resolutions and storm recovery drive this rebound. It may create notable volatility in assets tied to employment data.

Gold (XAU) Technical Analysis

Gold Daily Chart – Ascending Channel Pattern

The daily chart for gold indicates that the price is consolidating within an ascending channel ahead of the key US jobs data. Currently, the price is trading below the 50-day SMA and the midline of the RSI, increasing the likelihood of a correction.

However, December is typically characterized by thin liquidity, which often leads to false moves and extended periods of consolidation. If gold stays above the red-dotted trendline at $2,540, the overall trend remains bullish.

Gold 4-Hour Chart – Range-Bound Market

The 4-hour chart for gold shows that the price has been consolidating within a tight range over the past few days, with no clear directional movement. This short-term range is defined by the $2,610 to $2,670 levels. A breakout from this range will likely determine the next directional move for gold.

However, as long as the price remains above the $2,540 zone, the trend remains bullish.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – 1-Year Resistance Line

The daily chart for the US Treasury yield indicates that it has begun a correction from the 1-year trendline at 4.47%. The RSI has dropped below the midpoint, and the Treasury yield shows bearish momentum near the 50-day SMA.

A break below 4.10% would likely extend the downward momentum in the US Treasury yield, while a break above 4.47% could trigger the next wave of upward momentum. The key US jobs data will determine the next move in US Treasury yield.

10-Year Treasury Note Yield 4-Hour Chart –Ascending Channel Pattern

The 4-hour chart for the US Treasury yield shows that it is trading within an ascending channel and is approaching the support level at 4.10%. The lower boundary of the ascending channel defines this support.

The RSI is nearing oversold levels as the yield approaches this support. A break below 4.10% will likely extend the downward momentum, potentially following a brief rebound.

US Dollar (DXY) Technical Analysis

UD Dollar Daily – Correction from Resistance

The daily chart for the US dollar index shows it has started a correction from the upper resistance of a 1-year trading range at 107. This correction initially found support at 105.60, near the red trendline, prompting a brief rebound. However, the rebound was short-lived, and the index is again approaching the 105.60 support level.

A break below 105.60 would likely accelerate the US dollar index’s downward momentum. If this level is breached, the RSI will fall below its midpoint, signalling a potential drop.

It is worth noting that the 50-day and 200-day SMAs have remained flat over the past year, indicating a neutral market environment. The current decline from the upper resistance at 107 further suggests that the index might enter a bearish phase.

US Dollar 4-Hour Chart – Breakout from Ascending Channel

The 4-hour chart for the US Dollar Index shows that it trades within an ascending channel. It has also formed a strong bearish pattern near the channel’s resistance. Following a brief rebound from the 105.60 support level, the index attempts to break below this level.

A successful break below 105.60 would likely drive the index toward the 103.40 zone, signalling further bearish momentum.