Dollar Index & Gold Prices Chart 28 June – 2 July

Technical outlook – Dollar Index

The gold prices chart is looking for more direction during a week of important moves for the precious metal. Last week, the US Dollar Index failed to sustain its move to the upside following the Fed speaker’s dovish decision regarding tightening the interest rates. However, the index could well look up to the jobs report scheduled for Friday, and it is expected that the data will show an increase for the sixth consecutive month.

Technically, the index retreat from a resistance level last week after testing at $92.46. The greenback starts Monday on consolidation as investors still access the Fed’s lack of decision on tightening rates. The testimony by Powell last week states that FOMC is in no rush to do anything regarding the current inflation concern and rate hikes. Telling the lawmakers that the Fed will continue to support the economy for as long as it takes to complete the recovery process.

As investors wait for the NFP figures, the market is projecting that the labor market has added 675K jobs in June. At the same time, unemployment is expected to drop slight to 5.6% from 5.8% in May, and better-than-expected data could well be good for the Dollar index and could react bullishly.

A forecast below expectation may send the Dollar in a bearish direction. It could encourage the Fed to keep the current monetary policy and utilize its emergency response measures throughout the full year as the bank braces for a temporary rise in inflation.

Technically, the index starts Monday on a consolidation, and the bulls struggle to break above the minor resistance level of $91.90 as the focus is on the jobs report. A move lower could see the market look to test the support trendline of $91.45, and a sustained move on the trendline could see the price trades higher again. The bulls break above the minor resistance level could set the index for more gains but could meet another resistance at $92.40.

Technical outlook – Gold

The gold prices chart is currently looking for a direction to bounce back from last week sell-off but still struggling to break the current consolidation to get back up to the bullish direction. Friday’s PCE report saw the market trades higher but failed with momentum for buyers to keep a meaningful achievement to bounce back from losses.

The PCE data set by the Fed to measure inflation on Friday saw the reading print prices jump of 3.4% year on year in May, for the first time since 1992. Despite the signs of the economy running hotter than expected, the data was in line with the market expectations and, therefore, a disappointment for inflation bulls that believe the Fed is making a mistake in keeping the monetary policy unchanged.

With the focus on the US jobs report, the gold bulls will be eyeing the opposite of what the Dollar traders are expecting. A lower reading in the data will be a good run for the bulls, and figures above expectations could send the gold price lower.

Gold prices chart shows on the 4 hours timeframe how gold is under pressure and failing to break the consolidation zone, which was seen back in April 2021. The metal is most likely to continue the struggle to break above the 1800 minor resistance level as the bullish momentum eye a break on consolidation. A move higher would be significant if the price trades above the 1,810 level in the market, but the bulls could face another resistance level in 1824.