XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) defended mild gains on Monday amid thin markets and closed the day almost flat with XAU bulls eyeing fresh impetus from the week ahead. The pair advanced to 1209 highs surpassing 5-DMA resistance placed at 1207.61, albeit failed to extend gains further amid underlying greenback strength backed by upbeat US CPI figures and Yellen’s comment. However, the pair remained supported above 1200 – psychological levels.
XAU/USD finally breached the crucial 1200 support today and now trades near lows around 1195 levels. The pair fell to fresh two-week lows in the early European trades and extends declines below 50-DMA support located at 1197.70 levels mainly driven by fresh USD buying as European traders returned to their desk after an extended holiday. In the day ahead, markets eagerly await US durable goods orders data which is expected to boost USD bulls further.
The daily RSI at 46.70 aims sharply lower and has crossed the midlines in to the bear range, indicating more room for declines. Moreover, the pair now stands below all the major moving averages. Hence, to the downside, XAU/USD may extend to the next support at 1191.26 (May 13 low) levels, below which a fresh sell-off is likely to trigger drowning the pair to the channel trend line support of 1182.20 levels. In case the US data misses expectations, we could see a minor recovery in gold prices back around 1200 levels.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) extended gains and closed higher on Monday, clinging to 1100 – key levels and displayed a symmetrical triangle bullish breakout on daily charts. The pair remained supported above 50-DMA barrier of 1093.27 and extended beyond to 1101.71 highs largely on broad euro weakness on Greek default fears re-emergence. While rising US dollar also kept the euro undermined, supporting XAU bulls.
At the moment, XAU/EUR seems to have snapped its 2-day rally and slipped back below 1100 levels, having reached fresh 4-week highs at 1102.75 levels. The pair gave back gains and trades lower near 1098 levels largely on the back of a generalized XAU weakness amid persistent US dollar strength ahead of crucial US macro data later today. The daily RSI at 57 aims lower and shows negative divergence suggesting further downside in the making. The 5-DMA and 50-DMA confluence at 1093.50 remains the crucial support for XAU/EUR, below which selling pressure may intensify pushing the pair to 100-DMA support placed at 1090.40 levels. A break below the last, the pair may drop to 1085 levels. The upside for the pair seems restricted with 1100 – psychological levels acting as a critical resistance.
XAU/JPY pair – Daily Chart
Gold prices in terms of Japanese yen (XAU/JPY) extended its side trend for a fifth day in a row and continued to consolidate in a pennant formation with the upside capped by 147k levels. The pair climbed higher on Monday largely as the yen weakened on the back of surging demand for the US dollar amid holiday-softened trades. The pair remained on the 146k handle and closed the day higher at 146,807 levels.
XAU/JPY swung between gains and losses today, with the pair giving a pennant bullish break and rising to fresh weekly highs at 147,116. However, the pair erased entire gains and fell in red as the XAU was broadly sold-off on renewed US dollar strength in anticipation of upbeat US durable goods orders data. The yen falling to lowest in 8 yrs versus the US dollar at 122.75 also failed to keep the XAU/JPY pair lifted. The daily RSI at 61 has turned lower backing the case for further weakness. To the downside, a break below 5-DMA support at 146,500 levels the pair could drop to 146,180 (May 25 Low) levels. However, the losses may remain capped amid generalized JPY weakness.
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