KVB Market Analysis | 5 September: Gold Surges to $2,500 as US Job Vacancy Data Weakens, Eyes ADP R

Product: XAU/USD

Prediction: Decrease

Fundamental Analysis:

On Wednesday, during the US trading session, gold prices surged briefly, reaching $2,500 due to weaker US job vacancy data. On Thursday, gold traders will be watching the ADP employment data, often called the “mini non-farm payroll,” which is expected to trigger new market moves. The drop in US job vacancies increased the likelihood of a large rate cut by the Federal Reserve in September, causing the US dollar to weaken and US bond yields to fall. This pushed gold prices higher. The US Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) showed job vacancies fell from a revised 7.91 million to 7.67 million. This figure was below all economists' expectations surveyed.

Technical Analysis:

The upward trend in XAUUSD resumed on Wednesday, but buyers need to clear a key resistance level for gold to potentially retest the year's high. The momentum, as measured by the Relative Strength Index (RSI), suggests that buyers are in control, but the trend is flattening in the short term. If gold closes above $2,500 per ounce, the next resistance will be the all-time high of $2,531, followed by the $2,550 level. If it breaks above this, gold could aim for $2,600. On the other hand, if gold stays below $2,500, the next support will be the August 22 low of $2,470. If it drops below $2,470, the next support area will be around $2,431, where the April 12 high and the 50-day Simple Moving Average (SMA) meet.

Product: USD/JPY

Prediction: Decrease

Fundamental Analysis:

The Japanese yen fell more than 1% against the US dollar on Wednesday (September 4), as signs of a cooling US job market increased the chances of a larger rate cut by the Federal Reserve. The US Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) showed job vacancies dropped from 7.91 million to 7.67 million, lower than economists expected. After the JOLTS report, investors bet on a bigger rate cut from the Fed this month. Weak US data and more hawkish comments from the Bank of Japan strengthened the yen, as markets favored traditional safe-haven currencies this week.

Technical Analysis:

The USD/JPY resumed its downward trend after rising from $143.44 (August 26) to $147.21 (September 3 high), dropping after the US data release as momentum turned negative. The Relative Strength Index (RSI) remained bearish, signaling a short-term trend shift. The first support level for USD/JPY is the August 26 low of $143.45. If this level is broken, it could lead to further declines, with key support at $143.00, followed by $142.50 and $142.00. If these are breached, the next target is the August 5 low of $141.69. Bulls need to reclaim $148.45 to retake control.

Product: EUR/USD

Prediction: Decrease

Fundamental Analysis:

EUR/USD gained on Wednesday, bouncing back from a recent decline and finding support around 1.1050. Despite a slight upward move midweek, the pair is still struggling below the 1.1100 level. US jobs data remains the main focus for markets ahead of Fridays Nonfarm Payrolls (NFP) report. On the European side, the only major data this week is the Retail Sales report. Scheduled for release on Thursday, EU-wide Retail Sales for July are expected to show a small improvement of 0.1% year-on-year, compared to a -0.3% drop in the previous month.

Technical Analysis:

EUR/USD has fallen back to short-term technical limits, but buyers are still trying to keep the pair balanced, even though they haven't triggered a full recovery. Last week, EUR/USD reached a 13-month high just above $1.1200, but recent weakness in the US dollar has made it harder to keep those gains. The pair is still trading well above the 200-day Exponential Moving Average (EMA) at $1.0845. However, despite being in a generally positive zone, EUR/USD is facing increasing pressure as sellers aim for targets just above the 50-day EMA at $1.0956.

Product: BTC/USD

Prediction: Decrease

Fundamental Analysis:

The Bitcoin sell-off continues, but one small positive is that lower levels are attracting buyers. Trading company QCP Capital mentioned that Bitcoin could enter a period of high volatility. Many analysts believe the expected interest rate cut by the Federal Reserve on September 18 will benefit risk assets. However, Bitfinex analysts have a different view, predicting that Bitcoin could drop 15-20% after the rate cut. In their September 2 report, they suggested that Bitcoins bottom may be between $40,000 and $50,000. The risk of Bitcoin falling below its long-term range is putting pressure on altcoins, which have been weakening. According to CoinMarketCap, this has caused the total cryptocurrency market value to drop below $2 trillion.

Technical Analysis:

Bitcoin dropped from the 20-day Exponential Moving Average of $59,655 on Tuesday and fell to the support level of $55,724 on Wednesday. The market expects buyers to defend the $55,724 level strongly because if this support fails, Bitcoin could drop to $49,000. This level may attract strong buying from buyers, but sellers will try to block any rebound around $55,724. If it breaks below $49,000, the next target could be $42,000. On the other hand, if the price rises from the current level and breaks above the 50-day Simple Moving Average of $61,712, this negative outlook could be cancelled. The pair may then climb to $65,000 and later to the key resistance at $70,000.

Market Analysis Disclaimer:

The market analysis provided by KVB Prime Limited is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any financial instrument. Trading forex and other financial markets involves significant risk, and past performance is not indicative of future results.

KVB Prime Limited does not guarantee the accuracy, completeness, or timeliness of the information provided in the market analysis. The content is subject to change without notice and may not always reflect the most current market developments or conditions.

Clients and readers are solely responsible for their own investment decisions and should seek independent financial advice from qualified professionals before making any trading or investment decisions. KVB Prime Limited shall not be liable for any losses, damages, or other liabilities arising from the use of or reliance on the market analysis provided.

By accessing or using the market analysis provided by KVB Prime Limited, clients and readers acknowledge and agree to the terms of this disclaimer.

RISK WARNING IN TRADING

Transactions via margin involve products that use leverage mechanisms, carry high risks, and are certainly not suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be wary of those who guarantee profits in trading. You are advised not to use funds if you are not prepared to incur losses. Before deciding to trade, ensure that you understand the risks involved and also consider your experience.