In the vast and intricate arena of financial markets, every piece of economic data is akin to the opening act of an exhilarating dramaAt the heart of it all lies the much-anticipated non-farm payroll data, which is undoubtedly a focal point in the fierce competition of gold versus the U.S. and European marketsThe speculation surrounding how gold will engage in its battle for support levels during the non-farm data release is palpable, and questions arise as to whether the European and U.S. markets can maintain their trendline supportThis brewing suspense captivates global investors, while the market's tense atmosphere continues to intensify, drawing attention to every tick and fluctuation in asset prices.

Recently, the United States has been quite active in trade and economic matters, with every decision sparking widespread attention across the globeLast week, the U.S. government granted a one-month tariff reprieve to Mexico and CanadaThis brief respite provides both nations with essential breathing room and simultaneously fuels speculation regarding the future trajectory of trade relationsFollowing this, on February 9, the U.S. announced a 25% tariff on imported steel and aluminum to take effect on February 10, with indications that further "reciprocal tariffs" would followThe U.S. has also pointed to the implementation of a reciprocal trade policy while keeping auto tariffs under considerationThese series of actions emanate from a strategy to offset the costs associated with the extension of the 2017 tax cuts by ramping up tariffsThis policy reasoning has ignited considerable debate, as while higher tariffs might increase fiscal revenues in the short term, they could introduce long-term negative implications for global trade dynamics and the American economyThis could manifest in the form of retaliatory measures from trade partners and disrupt the supply chains and market demands for relevant U.S. industries.

From the economic data standpoint, January saw the U.S. add only 143,000 jobs, a figure that fell short of market expectations, thus casting a shadow over an otherwise optimistic employment outlook

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Nevertheless, the unemployment rate dipped to 4%, below anticipated levels, which somewhat alleviated market concernsOverall, the employment landscape paints a mixed picture, with the number of jobs created in the past year lagging behind projections, suggesting that the momentum in the American job market may be waningConcurrently, the yield on 10-year Treasury bonds has increased, affecting investor sentiment and market expectationsGold investment has faced restrictions due to the rebound of the U.S. dollar and bond yields, prompting investors to reassess their portfolios amid the oscillating market landscapeConsumer confidence also fell to a seven-month low, indicating a dip in public sentiment towards the future economy, while inflation expectations have risen, presenting new challenges for the Federal Reserve in crafting monetary policyFederal decision-makers believe the labor market remains relatively strong and are in no rush to cut ratesTraders speculate only one rate cut this year, with the likelihood of a June cut diminishingInvestors this week should keep a keen eye on Powell's testimony, the January Consumer Price Index (CPI) data, and retail sales statistics, as these figures will further illuminate the U.S. economic climate and provide crucial guidance for market trajectories.

Last Friday, the dollar index displayed a generally volatile behaviorPrices surged to a high of 108.308, dipped to 107.4, and closed at 108.093. Examining the performance of the dollar index on Friday, it experienced short-term fluctuations after the morning openingDespite an apparent downward trend, the previous day's low was not breached, indicating a considerable support system underneathFollowing the release of the non-farm data, the dollar index rebounded, continuing to rise overnight and ultimately closing with a significant bullish candleThis movement indicates an increased demand for the dollar following the data announcement

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Currently, from a technical analysis perspective, the weekly support rests at around the 107.80 range, daily support at the 108 range, and short-term four-hour support at approximately 107.90. Until this weekly support is breached, the market may focus on opportunities for a dollar index rebound, with immediate attention directed towards the 108.80 range as a key resistance level for further increases in the dollar index.

Suggested Trading Strategy: Given the current market conditions, it may be viable to consider long positions within the 107.90 to 108 range for the dollar index, with a stop-loss set at 40 points and a target aiming for the 108.80 levelThis strategy seeks to capitalize on rebound opportunities close to support levels for the dollar index, through judiciously placed stop-loss and take-profit strategies intended to maximize investment gains.

On the same day, gold prices also showed signs of turbulence, soaring to a high of 2886.68, dipping to a low of 2852.39, and finally closing at 2861.59. Reflecting on the recent trends in gold, the price has met resistance at three critical junctures: first through a decline past four-hour support before reclaiming higher ground, showcasing the fierce battle between bullish and bearish market forces; secondly, a dip to the upward trendline, which has proven to provide a support cushion; and thirdly, a robust closing the previous day that exceeded prior highs, demonstrating moments of bullish dominanceHowever, following last Friday’s considerable fluctuations, attention must now turn to the support level at 2852. If this support remains intact, the bullish trend can continue, allowing investors to hold long positions; however, a breach of this support raises the risk of retreating toward the 2833 and 2803 regions, which will act as significant defensive lines if further decreases in gold prices manifest.

Suggested Trading Strategy: Investors should closely monitor the support and resistance emerging at the 2852 level

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