Gold Price Futures (GC) Technical Analysis – Trader Reaction to $1686.00 Set the Tone Ahead of ADP Report

Gold futures are trading nearly flat in choppy trading on Wednesday as the U.S. Dollar edged lower against a basket of major currencies. The market traded lower shortly after the cash market opening, but buyers came in to stop the slide slightly above its March 8 bottom.

At 09:16 GMT, June Comex gold futures are trading $1685.40, down $0.60 or -0.04%.

Despite the slight technical bounce, the market is still headed for its worst quarterly fall since December 2016, as a surge in U.S. Treasury yields and the dollar dented safe-haven bullion’s appeal.

Traders are looking for a strong reaction to today’s ADP Non-Farm Employment Change report, due to be released at 12:15 GMT. It is expected to show the private sector of the economy added 552K jobs in March. This will be a huge jump from the previously reported 117K.

Daily Swing Chart technical Analysis

The main trend is down according to the daily swing chart. A trade through $1676.20 will reaffirm the downtrend. A trade through $1756.00 will change the main trend to up.

The nearest resistance is a long-term Fibonacci level at $1711.90.

The short-term range is $1817.60 to $1676.20. Its retracement zone at $1746.90 to $1763.60 is the next potential resistance zone.

The major resistance level is the long-term 50% level at $1788.50.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract on Wednesday will be determined by trader reaction to $1686.00.

Bearish Scenario

A sustained move under $1686.00 will indicate the presence of sellers. This could lead to a test of the main bottom at $1676.20. This is a potential trigger point for an acceleration to the downside with the next target a long-term minor bottom at $1594.00.

Bullish Scenario

A sustained move over $1686.00 will signal the presence of buyers. If this creates enough upside momentum then look for a possible surge into $1711.90.

Side Notes

Gold begins the session down nine sessions from its last main top. This puts it inside the window of time for a potentially bullish closing price reversal bottom. If confirmed, this could lead to the start of a 2 to 3 day counter-trend rally.