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

The US Dollar Index (DXY) rebounded higher on Tuesday, reversing two days of losses. The robust economic data and a hawkish stance from the Federal Reserve supported this recovery. The strong labour market indicators, including job openings, have bolstered the US Dollar Index. Additionally, a rise in the ISM Services PMI to 54.1 has further strengthened its strength. The inflation concerns are also highlighted by a surge in the ISM Services Prices Paid index to 64.4, further bolstering the case for sustained Fed rate hikes. These factors have kept US Dollar bulls active ahead of December’s Nonfarm Payrolls report.

On the other hand, US Treasury yields continued to climb this week, with the 10-year yield nearing 4.70%. The higher yields reflect investors’ expectations of prolonged elevated interest rates, further reinforcing the US dollar’s strength. The early resignation of Fed Vice Chair Michael Barr, which could signal changes in regulatory oversight, has drawn some attention. However, the market remains focused on US labour data and inflation trends as key factors in assessing the Fed’s trajectory.

The strong dollar and rising Treasury yields pose headwinds for gold (XAU), as higher yields increase the opportunity cost of holding the metal. However, geopolitical tensions and trade war concerns sustain safe-haven demand, supporting gold prices. The market is closely watching the US Nonfarm Payrolls data to gauge the Fed’s next move. This data could determine whether gold prices stabilize or face further downward pressure. The balance between inflation fears and interest rate expectations remains a key factor shaping gold’s near-term trajectory.

Gold (XAU) Technical Analysis

Gold Daily Chart – Ascending Channel

The daily chart for gold shows the price trading within an ascending channel. However, price fluctuations in December have formed a symmetrical triangle. The price trades near the triangle’s apex, awaiting a breakout to determine the next direction. The RSI is neutral around the mid-level, while the price remains above the 50-day and 200-day SMAs, indicating the potential for the upward trend to continue. The trend remains bullish as long as the price stays above $2,550. On the other hand, a breakout above $2,720 would signal the start of a stronger upward move.

Gold 4-Hour Chart – Symmetrical Triangle

The 4-hour chart for gold shows that the price is trading within a symmetrical triangle, awaiting its next directional move. The price has rebounded from the lower boundary of the triangle, indicating strength and the potential for upward momentum. Moreover, fluctuations in the RSI suggest that the pair needs a breakout from the triangle to establish its next price direction.

Treasury Yields (TNX) Technical Analysis

10-Year Treasury Note Yield Daily Chart – Inverted Head and Shoulders

The daily chart for US Treasury yields shows that the yield has approached the key resistance level of 4.70%, signaling a potential breakout. The emerging pattern on the daily chart indicates the formation of an inverted head and shoulders, pointing to upward momentum. A breakout above 4.70% would confirm an upward trend in US Treasury yields.

10-Year Treasury Note Yield Hourly Chart – Ascending Channel Pattern

The 4-hour chart for US Treasury yields shows that they are trading within an ascending channel and continuing to move higher. The ascending channel pattern suggests a potential price target of 4.80%. Additionally, a rebound from the support level of the ascending channel at 4.10% indicates that the upward trend is likely to continue.

US Dollar (DXY) Technical Analysis

UD Dollar Daily Chart– Bullish Trend

The daily chart for the US Dollar Index shows that it has broken the long-term resistance level 107 and continues to trade higher. The upward trend in the US Dollar Index since September 2024 has formed an ascending channel pattern, indicating a bullish trend. The upcoming jobs data will provide further direction for the US Dollar Index and play a key role in influencing gold trends.

US Dollar 4-Hour Chart – Ascending Channel

The 4-hour chart for the US Dollar Index shows an ascending channel pattern, with the price finding support at the channel’s lower boundary and appearing poised to rebound higher. The formation of an inverted head and shoulders pattern near the 105.60 support level indicates bullish momentum. If the index continues to trade higher, the target remains at 111.