US Nonfarm payroll (NFP)

Nonfarm Payrolls measure the change in the number of people employed during the previous month, excluding the farming industry. Job creation is the primary indicator of consumer spending, which accounts for most economic activity.

NFP for November 2021 increased by only 210K, which was lower than the expected 550K. This was a significant drop versus the October number of 546K.

The report is due Friday, 7 January 2022 @ 13:30 GMT

XAUUSD Daily time-frame:

XAU/USD Daily time frame analysis chart

Analyzing the overall trend is the most crucial step in trading. Traders can use any strategy to do it. One of the best ways is to apply a 200 moving average in the chart or use any indicator that does the same.

Looking into the daily time frame for higher confirmation, we see the market currently was in a short-term downtrend. We see the price touching the dynamic support (1681.30)  thrice and jumping again, moving up.

Moving forward, we can see the price after the last support touch at around 1681.30 and got a significant rejection from the buyers showing the buying pressure. Since then, the market has been moving in a bullish channel.

Furthermore, the 50-MA crossed the 200-MA from down, moving up, giving a buying trade signal—also, a perfect long-legged doji formed on 10 August at around 1728.68.

The overall market seems to be moving up for a short time till the next swing high at 1875.00

Potential pivot points using Price Action:

Resistance Pivot		Support Pivot
R1	1822.66	S1	1787.86
R2	1845.23	S2	1775.63
R3	1857.46	S3	1753.06

This considerable resistance and support level can enter or exit when approaching future market openings.

XAUUSD 4hr time-frame:

XAU/USD 4hr time frame analysis chart

In the 4hr time frame, we can see that the market is following exactly how it is on the daily time frame. After a short-term down movement, we see the price make higher lows and higher highs. This here gives additional confirmation.

On the RSI, we see the bullish divergence that shows the buying trend is due. Looking at the overall market structure, we see the price following a bullish trendline. The first touch was around 1764.51, while the second and third touch is at 1789.48 and 1799.44, respectively.

Traders here may take a buy trade here as we can see multiple candle rejections while forming the higher low around 1789.48. We can also see a pin bar candle formation that gives an extra confirmation.

Key Trading Recommendation

Gold (XAU/USD) is a highly risky commodity to trade, so traders are advised to use the proper risk management strategy.

The first NFP for 2022 is due this Friday, and it is one of the most critical data tracked by the Federal Reserve, furthermore, it will be a crucial driver of Gold’s overall trend as it impacts the USD strength significantly.