Dollar Slips on Weak Payrolls

Friday's weak nonfarm payrolls report saw gold futures rally over 2.20% or about $25.26 points on Friday afternoon following the announcement. Gold futures which declined by over -3.50% during the week managed to recover most of the losses, closing the week at a -0.72% loss. The emerging technical pattern in gold futures indicates a possible move to the upside upon break above key resistance in the ascending triangle pattern. A close above the resistance sitting at 1168 and 1170 is required in order for gold to rally towards the psychological price level of 1200 and eventually to 1221. The longer term descending wedge pattern indicates an eventual upside to 1300 should prices take support above the 1221 resistance for support. Gold posted a new 52-week low of 1077.18 back in July and has since then remained choppy for the most part.

The services PMI from Eurozone and its main economies will be released later today. The flash services PMI numbers released last week showed the services PMI at 54.0 and 53.9 for the composite PMI. Expectations are for the services and composite PMIs to have risen to 54.2 and 54.0 respectively. A match of estimates will confirm consistent growth on a quarterly basis, validating the third quarter Eurozone GDP estimates around 0.40% for the quarter. Consumption is likely to lead the way on account of lower fuel prices and higher household income. The Eurozone Sentix investor confidence is due for release today, with the median estimates pointing to a soft print of 12.2 compared to 13.6 last month. EURGBP closed Friday with a small bodied candlestick pattern near the top which could potentially signal a short-term decline in prices with upside resistance at 0.7432.