What is Left After the Better NFP? Gold, EUR/USD and DXY

Did NFP on Friday started the new trend of the stronger USD or was that just a small correction of the recent trend? We will look for the possible hints on three major instruments: Gold, EURUSD and the Dollar Index.

First is Gold, which in the short term was more bearish as we had a smaller flag after the heavy drop on Friday, which was suggesting us a further decline. Instead of that, the smaller flag was denied and the price bounced of the long-term support on the 1258 USD/oz. Currently we are below the resistance of the much bigger flag (bullish) with a high chances for a breakout.

Next instrument is EURUSD, which on the other hand is still bearish as long as the price will stay below the 1.1825, which is the closest resistance.

The last one is the Dollar Index which after NFP managed to break two important down trend-lines and stopped exactly below the last one. So far, it looks like this stop is not really a stop but a pause and traders should come back to the buying option soon. Price is locked in a small wedge, where the chances for a upswing are bigger than for a drop.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis