GOLD's Pullback at Fibonacci Level Supports Potential Long Setup

Yesterday, gold made a significant breakout, surpassing the dynamic trendline of the bearish channel and indicating a shift in the short-term direction. It has now retraced back to align with the main trend in the daily timeframe. The price experienced a pullback at the 50% Fibonacci level, coinciding with a previous support point. These indicators point towards a potential long setup in line with the main trend.

From a fundamental perspective, gold has received a boost as the USD Index is expected to continue its bearish trajectory due to the lack of recovery signals.

In the Asian market, S&P500 futures have recorded notable gains, reflecting a positive market sentiment. This positive sentiment stems from the clearance of the US debt-ceiling bill in Congress and a decrease in expectations of another interest rate hike by the Federal Reserve (Fed).

The US Dollar Index has reached its weekly low at 103.45, influenced by Fed policymakers' inclination towards a pause in the June monetary policy meeting. This decision takes into account the consistent contraction of domestic factory activities in the US.

The upcoming United States Nonfarm Payrolls (NFP) data will be a crucial catalyst that could potentially influence the US Dollar's fate. Economists at Commerzbank anticipate that if the May labor market report shows strength and surpasses expectations, the Dollar may experience a rise. They further predict that approximately 200,000 new jobs will have been created in May, following the 253,000 in April, with the unemployment rate likely remaining at 3.4%. However, achieving the desired significant weakening of the labor market, which could dampen inflation, is yet to be accomplished.