XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) rebounded sharply on Friday after displaying a symmetrical break down on Thursday. XAU/USD ended the day week at 1207.36, bouncing off highs at 1210.72, contained below 100-DMA located at 1211.96 levels. The pair swung back higher above 1200 levels as traders felt that ongoing debates regarding Fed rate lift-off was overdone and hence the greenback witnessed a corrective slide.
XAU/USD paused its rebound and fell back closer towards 1200 levels as the persistent strength in the US dollar kept a lid on the upside. The pair trades near lows around 1203 levels with USD bulls back in to the bids largely correcting losses from the previous session. XAU/USD is expected to edge lower with limited EUR &US economic data on cards, US dollar moves are expected to dominate across the board. To the upside, the pair may faces strong resistance at 100-DMA levels located at 1212 levels. A break above that level, XAU bulls may storm their way to the next resistance at 1215 levels. To the downside, the pair may fall from current levels and retest strong resistance at 50-DMA located at 1201.60 levels. A fresh XAU sell-off may trigger below that level, knocking off the pair to the immediate support at 20-DMA placed at 1193 levels. The daily RSI at 53 aims lower suggest more rooms for downside. Overall, with the technical indicator favouring resumption of last week’s downtrend, XAU/USD may witness limited upside with US dollar strength likely to prevail.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) broke above the channel tend line resistance located at 1136.80 on Friday and advanced to fresh ten week highs at 1140.80. However, the pair failed to extend beyond highs and retraced back to 1137.80 on close. XAU/EUR managed to close above the short term upside channel on weekly basis. The pair rose sharply to highest levels in three months after the EUR/USD tumbled to three week lows at 1.0567 levels, lifting gold prices in EUR terms.
Currently, the pair trades near lows at 1136.70 levels, bouncing off highs at 1140.26 levels and well below the channel trend line resistance now located at 1138.48. The pair seems to consolidate previous gains and edged lower this session largely on profit-taking after the recent strength. The shared currency also seems to have stalled its downslide versus the US dollar for now, pulling XAU/EUR lower. The daily RSI at 66 points has turned flattish indicating no clear direction. However, with the ongoing broad euro weakness likely to extend, XAU/EUR may rebound from current levels and retest channel trend line resistance. The pair may retest previous highs at 1140.80 and climb further to 1145-1150 levels.
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