ADP expected at -20 million on Wednesday – Gold with new yearly highs?

Maj 06, 2020 12:30

Source: Economic Events May 6, 2020 - Admiral Markets' Forex Calendar

On Wednesday, Gold traders will watch the ADP employment change in excitement.

After ADP data dropped to -27,000 in March, showing the first fall in private payrolls since September of 2017 with the report only including data through March 12th and thus not fully reflecting the impact of the coronavirus, analysts expect the ADP employment change to come in at -20 million.

Especially after initial jobless claims showing a number of over 30 million over the course of the last six weeks, this expectation seems to draw a more realistic picture of the current US employment situation, given the Corona lockdown.

Any number which comes in even worse could realistically trigger a next sharper leg up in the yellow metal, bringing the region around 1,750 USD back into focus in the days to come.

On the other hand, we'd again like to point out the bearish divergence in the RSI(14) on a daily time-frame (orange) which would be confirmed with a break below 1,660 USD and make a deeper corrective move as low as 1,630/35 USD possible.

Still, With that in mind, we keep our bullish take on Gold, favour Long engagements from a risk-reward perspective, but also from a purely technical perspective as long as we trade above 1,440/450 USD.

If we the short-term corrective move accelerates, a potential first target around 1,650 USD while a first target on the upside can be found around 1,800 USD:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between February 4, 2019, to May 5, 2020). Accessed: May 5, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of Gold fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.

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