Gold reverses headline NFP-led knee-jerk slide, jumps to fresh session high

Gold has managed to recover its lost ground and is now headed towards the top end of daily trading range in the post-NFP trading action. 

The precious metal reversed knee-jerk downward spike to session low at $1207 level, touched in reaction to upbeat headline NFP print (227K), and regained traction to currently trade around $1217 region, testing session peaks, on disappointment from lower-than-expected average earnings growth (0.1% m-o-m) and up-tick in the US unemployment rate(4.8%).

Mixed jobs report failed to extend an additional support to the greenback's ongoing recovery move and boosted dollar-denominated commodities. In fact, the key US Dollar Index has now reversed all of its daily gains and has slipped back below 100.00 psychological mark. 

Meanwhile, a sharp slide in the US treasury bond yields is further pointing towards receding expectations of Fed rate-hike action in the near-term and providing an additional boost to the yellow metal's sharp recovery in the past hour or so.

Next on tap would be speech from FOMC member Charles Evans and the US ISM non-manufacturing PMI, which would be looked upon to grab some short-term trading opportunities. 

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes, "Right...Gold...well the break back below 1216 is a little bit worrying...We do have divergence on the charts and we do have the sto-chastics beginning to turn negative...I say beginning because it is not done just yet...so we wait....We know we have good support down at 1206/04..and we know there is enough momentum before for this support to hold....However...technical data telling a little bit of a different story today....So if we fall through 1204 we need to hold 1197...If we fail then we have a target zone of 1172...I think buyers will be eager to jump in at these lower levels...Now the other side is we hold 1206/04...This done...we can trade back above 1216 and then have enough momentum behind us to trade higher and we still have this 1229/1233 area as a viable target for Gold..."