XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) suffered the biggest weekly drop in the month ending lower on Friday at 1206.03, bouncing-off lows near 20-DMA located at 1200.76. XAU/USD witnessed huge volatility on Friday after the pair advanced to highs just ahead of 200-DMA located at 1214.81. However, the pair failed to sustain at higher levels and swung back lower towards 20-DMA after USD recovered on upbeat US core inflation reading and on Yellen’s hawkish comments.
Currently, XAU/USD trades near highs around 1205 levels, inching higher towards 5-DMA resistance located at 1207.27. The pair trades in a slim range and edges higher in the Asia largely on the back of a short-covering rally after the recent weakness on a solid USD rebound. In the day ahead, we have a data empty macro calendar with European and US markets closed on account of a national holiday. Hence, XAU/USD is expected to remain supported above 20-DMA located at 1201.01 amid thin volumes and broad US dollar strength. The daily RSI at 51.55 has turned flat to slightly lower, also suggesting limited XAU moves today. To the upside, the pair may advance to test the 5-DMA resistance beyond a break of daily highs at 1205.24. A break above 5-DMA, the pair could to next resistance located at 1211 where 10-DMA lies. Overall, the pair may remain supported so long as it holds above the major 20-DMA support.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) reversed previous losses and climbed higher to display a perfect symmetrical triangle bullish breakout on Friday, reaching fresh three week highs at 1096.17 and finally surpassed critical 50-DMA resistance placed at 1093.14. The pair rallied on Friday after the EUR/USD pair tumbled to fresh multi-week lows testing 1.10 handle on stronger US data while Greece concerns also weighed.
At the moment, XAU/EUR extends gains beyond 50-DMA resistance-turned support located at 1093.20 and trades lifted around 1097, with 1100 – psychological levels in sight. The pair extends its upbeat momentum as the shared currency continues its downslide versus greenback at the start of the week, breaking below 1.10 handle. Fear over Greece’s debt repayments to IMF in June continues to hurt the euro, benefitting gold prices in that currency. The daily RSI around 57 aims higher indicating further scope for upside. To the upside, the pair may test 1100 levels and beyond that may retest 1105 (April 29 High) levels. The downside seems limited as the pair is likely to cling on to the 50-DMA support amid holiday-thinned trades. However, a breach of the last, gold bulls may edge lower for a test of 100-DMA resistance-turned support placed at 1090 levels.
XAU/JPY pair – Daily Chart
Gold prices in terms of Japanese yen (XAU/JPY) continued its accumulation phase in a pennant formation, although ended higher on Friday at 146,397 levels. The pair advanced to fresh highs at 146,746, failing to reach 147k barrier. XAU/JPY gained on Friday after the yen weakened across the amid broad based US dollar strength.
Currently, XAU/JPY extends its upside bias and trades higher near 146,500 levels, clinching to the 5-DMA support located at 146,300. The pair extends gains largely as the USD/JPY pair touched a new two month high at 121.78 levels this Asian morning as the greenback remains boosted on impressive US CPI figures and on Yellen’s reiteration that "it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy." The daily RSI at 61 remains in the overbought territory and points out to further upside. Hence, XAU/JPY is likely to extend to the trend line resistance located near 147k levels in the day ahead amid broad JPY weakness. A bullish pennant breakout above the last will expose XAU bulls to 147500 (May 18 High) levels. Overall, the pair is likely to remain underpinned above 5-DMA support amid thin volumes as traders are away on an extended holiday.
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