XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) gave a descending triangle bearish breakout and tested fresh four month lows reached on Tuesday at 1166.43. The pair edged lower on the back of broad based US dollar strength following stronger than expected US jobs data and manufacturing PMI report. XAU/USD dropped to lows at 1167.53 before recovering to 1168.24 at close.
XAU/USD extends its bearish momentum and trades near to fresh four month lows posted at 1164.76. The pair prolongs its downslide as higher global equities coupled with a broadly stronger US dollar continue to weigh on the yellow metal. Markets anticipate a better reading for the US non-farm payrolls figures due later today following a solid ADP print seen on Wednesday. Moreover, optimism surrounding Greece after Tsipras letter showed that Greece is willing to accept bailout condition faded gold’s appeal as a safe-haven.
Technically, the daily RSI at 36.75 aims lower, although it remains in an extremely oversold and we could a rebound later today, although that depends on the NFP results. To the downside, the pair is likely to test 1161.29 (June 5 Low) level, below which floors would open for a test of 1159.50 (March 19 Low). This holds true if we get a stronger NFP reading. However, if the jobs data surprise markets on the downside, then we may see gold prices swinging back higher above 1171 levels and could retest 10-DMA located at 1177.50 and beyond.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) breached the descending triangle resistance above 1058 levels, displaying a bullish break, closing Wednesday in green at 1058.52. The pair extended gains for the second straight session and remained strongly bid yesterday as the shared currency was heavily sold-off amid a Greek default and nervousness around Sunday’s referendum. Moreover upbeat US macro data further accentuated the pain in the euro, boosting XAU/EUR higher.
Currently, XAU/EUR clinches to the 20-DMA support located at 1052.15, having broken through the 5-DMA support at 1053.53. The pair rebounded lower, facing rejection at the trend line resistance located at 1058.05 levels. XAU/EUR reversed previous gains and fell back in red mainly driven by broad based XAU sell-off ahead of the crucial US employment data. While a minor rebound in EUR/USD also weighed on the gold pair.
The daily RSI at 46.43 aims lower indicating further room for downside. Hence, the pair is likely to test 20-DMA support, below which the pair could drop to 1049 (July 1 Low). A break below the last selling pressure is expected to intensify dragging the pair sharply lower to the 200-DMA and trend line support confluence at 1039-1039.40 levels. Overall, a generalized intraday downside bias persists so long as 1058.47 levels is breached.
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