Gold Analysis: XAU/JPY likely to retest 142,000

XAU/USD pair – Daily Chart

Gold prices in terms of US dollar (XAU/USD) ended Friday on a positive note at 1203.27, despite registering a negative close on the week. The XAU/USD pair clinged to the 1200 barrier completely shrugging off a solid comeback in the US dollar after consumer sentiment in the US improved and the inflation print came in line with expectations. In fact the pair advanced to highs of 1207.78 on US CPI release, however eased off highs and fell back closer towards 1200 marker post UoM consumer sentiments numbers.

Currently, XAU/USD trades near lows 1203.81 levels, well supported above 10-DMA located at 1201.60, with a day’s high at 1206.67. The pair seems to consolidate previous gains and edged lower on a round of profit booking after the recent gains. The pair seems struggling between a tight band with the upside capped by 100-DMA located at 1212.40 levels and downside cushioned by 50-DMA placed at 1196.17. The daily RSI at 53.20 has turned slightly flattish suggesting a wait and watch mode amid a data-dry EUR and USD calendar. The pair is expected to remain range bound with a likely test of 100-DMA beyond a break of daily highs. To the downside, the pair may test 10-DMA at 1201.60 and XAU bears may take below last, knocking the pair to the 50-DMA crucial support.

XAU/EUR pair – Daily Chart

Gold prices in terms of Euro (XAU/EUR) ended slightly lower on Friday at 1112.96, clinging to the 20-DMA support located at 1110.55 and bouncing-off a brief dip below that level. The pair climbed to highs at 1119.98 during the North American session after the US dollar was boosted on upbeat macro data releases, dragging the shared currency lower across the board. However, the upside remained capped by the 10-DMA barrier located and the pair inched back closer towards the 20-DMA support.

Currently, the pair trades elevated near highs around 1116.60 levels, with XAU/EUR managed to surpass the trend line support –turned resistance located at 1116.10 levels and extend beyond. The pair has formed a doji candle on daily charts indicating indecisiveness between bulls and bears. However, the daily RSI at 53.96 aims higher pointing out to more room on the upside. The bullish momentum is likely to be confirmed on a break above 5-DMA resistance located at 1118.84, beyond which the pair may retest 10-DMA located at 1121.68. A break above the lasts, XAU bulls may storm their way to test 1136.50 (April 16 High) levels. However, with limited economic data on cards, the pair may remain within 10-DMA range on the upside and 20-DMA support located at 1112 levels.

XAU/JPY pair – Daily Chart

Gold prices in terms of Japanese yen (XAU/JPY) traded more or less in a tight range last week, closing almost flat on Friday at 142,889 levels, bouncing-off highs near 10-DMA located at 142,900 levels. The pair remained supported above 142,500 levels largely on yen weakness after broad US dollar recovery. However, the upside remained capped as the recovery in the US dollar was expected to be short-lived and XAU/JPY inched lower on yen pullback.

XAU/JPY currently is seen testing lows at 142,970 levels, wavering around 5-DMA located at 142,951 levels. The pair bounced-of highs at 143,395 levels, failing yet another time to breach 20-DMA resistance located at 143,465 levels. The RSI at 48 has turned flat indicating no clear direction in view as the USD/JPY continues to consolidate in a very slim range, providing limited momentum on XAU/JPY. To the downside, the pair may further extend losses till 142500 (April 17 Low) barrier and below that floor may open till 142k levels. Selling pressure is expected to intensify below the 142k threshold, dragging the pair lower to retest trend line support at 141,600 levels. The upside seems limited and may remain capped by the 20-DMA resistance at 143,465 levels. Overall, XAU/JPY is expected to retest 142k levels, as the yen is expected to remain underpinned amid continued USD weakness seen over the past week.