After a quick surge to start last Friday, the US Dollar Index is back below 90.00 and hopefully looking to push lower. As a result, Gold (XAUUSD) is setting up its next leg higher.
The month of May was not too kind to traders as the Dollar took its sweet time to head lower. In addition, each new lower low was accompanied by a sizeable retracement back to the upside. This made trading with the bearish Dollar a lot harder than it needed to be.
For the most part, Gold had a pretty successful trading month as the price was able to push +1,500 pips to the upside. With further bearishness expected for the Dollar, we can expect more gains to come. Traders are looking to aim for this year’s high as a target.
Later this week we will have the Non-Farm Payroll release and current forecasts are expecting unemployment to drop a tad bit. This could provide the Dollar a last line of support or be the catalyst for a meltdown if the job numbers are poor.
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- Read yesterday’s breakdown: Dollar Prints Doji + Gold and Oil Longs for Next Week?