XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) continues its bearish momentum within the descending triangle pattern, having tested the trend line support at 1170 levels on several occasions. However, the pair has managed to give a daily closing above that level, keeping gold prices buoyed. XAU/USD dipped to fresh four week lows of 1166.43 on Tuesday largely on the back of broad USD strength, completely shrugging off Greek defaults news.
XAU/USD staged a minor rebound today and trades in a narrow range around 1174 levels with the upside capped by 5-DMA located at 1175.05. The pair finds good support at the trend line support located at 1171 levels. The pair defends mild gains as dust settles over Greece as the debt-ridden nation finally defaulted on its debt late Tuesday. However, the upside remains short-lived as the USD bulls are expected to jump back in the bids ahead of a batch of US macro releases later today. Moreover, the US dollar remains supported following yesterday’s impressive consumer confidence figures.
The daily RSI at 42 has inched slightly higher indicating some room for upside; however with the ADX hovering around 13 indicates that the upside may lose momentum in the day ahead. Hence to the downside, the pair could retest trend line support at 1171 levels, below that June 30 Low at 1166.43 could act as the next support. To the upside, beyond a break of 5-DMA, XAU/USD could rise to 1181-1181.60 levels – confluence zone of 10-DMA and 20-DMA. Overall, the negative bias persists as greenback is expected to regain lost ground with DXY swinging back higher above 96 levels.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) posed a solid recovery from the last week’s slump and ended in green on Tuesday at 1053.35 levels, recovering completely from a dip to 1041. The pair initially lost ground and fell to lows as the shared currency was supported on last-minute Greek deal hopes, however with no updates from Greece front almost through the day with deadline nearing the euro gave back gains and fell deep in red, boosting XAU/EUR to highs above 1050 levels. Finally, Greece default became a reality late Tuesday night, keeping the pair supported.
Currently, XAU/EUR trades around 1154.50 levels, well supported above 10-DMA located at 1052 levels. The pair remains lifted mainly on broad euro weakness as markets continue to digest the latest Greek default headline while a series of Euro zone data is now eagerly awaited for fresh incentives. The daily RSI at aims higher and looks to breach the mid line and reclaim the bull range which suggest further upside likely. The pair could rise further for a test of crucial falling trend line resistance at 1058 levels. Beyond which XAU bulls are likely to dominate taking the pair higher towards 1064-1065 zone. To the downside, a break below 10-DMA support, the pair could drop to 20-DMA located at 1050.10 levels. Overall, the pair is expected to keeps its upbeat momentum intact and may head higher beyond 1060 levels.
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