XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) extended gains from the previous session and pierced through the 20-DMA resistance located at 1196.28 on Tuesday and reached daily highs just shy of 1200 marker at 1199.84 levels. XAU/USD finally settled at 1195.25, with the rally spurred by mixed US macro data which weighed on the greenback. The US trade deficit widened to the highest levels in 6 years while services PMI eased from 7-month high in April. The Institute for Supply Management - increased to 57.8 points in April, posting better than the expected reading of 56.2.
Currently, XAU/USD wavers around 20-DMA located at 1196, having posted fresh highs at 1196.97 above that level. The pair edged higher, extending its upsurge for the third straight session as broad US dollar weakness creeps in to the European session, supporting gold bulls. The daily RSI stands flat at 50 indicating that markets await fresh incentives from the upcoming US ADP non-farm employment change data and Fe Chair Yellen’s speech later today. To the upside, the pair may edge higher to retest 1200 barrier above which XAU bulls may take over driving the pair higher to (April 30 High) 1207.27. A break above the last, XAU/USD may test 100-DMA located at 1210.50. However, if the fail break below the 0-DMA support located at 1193.10, the pair could drop to 50-DMA located at 1190.70 levels., which would open floors for a further test of 5-DMA placed at 1188 levels. Overall, the pair is expected to remain supported so long as it holds above 50-DMA support.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) closed higher on Tuesday at 1069.18 levels, bouncing-off highs at 100-DMA located at 1076 levels. The downside was restricted by 5-DMA support around 1065 levels despite broad euro strength seen yesterday. The EUR/USD pair advanced and tested 1.13 handle after the US dollar ticked lower on mixed US economic releases, there keeping a lid on XAU/EUR.
Currently, the pair trades near session lows around 1063.18 and is on its way to test 5-DMA support located at 1161.40 levels as the EUR/USD pair extended gains and heads towards 1.13 handle ahead of a raft of Eurozone data including final services report and the retail sales figures. The daily RSI at 39 aims lower further towards the oversold zone indicating that the pair is likely to test 5-DMA at 1161.40. A break below the last, selling pressure may intensify, dragging the pair to the trend line support located at 1051 levels. The upside looks limited and only a break above 1070.43 (May 4 High) levels will confirm further upside momentum. Overall, with technical indicator and the moving average reflecting bearish bias, XAU/EUR is expected to keep losses and drop to 1151 levels.
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