XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) prolonged its downward spiral for the fifth straight session and hovered near two week lows on Thursday, ending the day at 1174.38 levels. The pair maintained an offered tone and remained more or less in a narrow range as Greece concerns supported the safe-haven demand for XAU/USD. While a host of US data had negligible impact on the greenback, keeping the pair buoyed above 1170 levels.
Currently, XAU/USD seems to consolidate around 1174.50 levels and trades in an extremely tight range amid lack of fresh triggers as ongoing Greece saga with no deal reached once again at Thursday Euro group meeting, favours the gold bulls. While the greenback trades directionless and awaits consumer sentiment report from the US for fresh cues. Technically, XAU/USD has formed a small doji candle on the daily charts while the RSI at 41 has turned flattish, both indicating lack of clear direction. Hence, to the downside, the pair is likely to remain supported above the triangle formation trend line support located at 1170 levels. However, the upside seems limited to 5-DMA resistance placed at 1178 as the pair is making lower highs backing the case for continuation of the ongoing downtrend.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) extended its accumulation phase and ended Thursday lower at 1048.33, once again closing below 1050 levels. The pair fell yesterday, having faced rejection at 20-DMA located around 1054 levels, largely as the EUR/USD pair stood resilient to the impending Greek talks, clinging to 1.12 barrier. Moreover, a largely subdued US dollar also failed to have major impacts on XAU pairs across the board.
XAU/EUR inches slightly higher today and struggles at 5-DMA and 10-DMA confluence located around 1050 levels. The pair poses a mild rebound as the shared currency loses momentum and slips below 1.1200 levels versus the buck on yet another Greece fallout at Euro group meeting on Thursday with the EU officials asking Greece to submit new reform proposals altogether. The pair looks to once again retest 20-DMA now located at 1052.70 levels, beyond which the pair faces stiff résistance at 1055 levels (Previous highs). However, it is expected that the shared currency may remain broadly in a narrow range amid a data-dry economic calendar while traders eye Greek updates.
Thus, the upside remains restricted as losses in EUR/USD may be short-lived and the pair may regain 1.12 handle shortly. However, to the downside, the pair could retest 1044.48 (June 25 Low), below which floors open for a test of the trend line support and 200-DMA confluence zone which lies in the range of 138.68-137.40 levels.
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