Fundamentals turn the Day to Dollar Day

XAUUUSD, H4 and Daily

Gold finally breaks today, the strong resistance at the 200-Day SMA , at  $1,307.00. Gold boosted higher to month’s high, as the US dollar advanced following the strong retail sales outcome, lower jobless claims, and firmer import prices. The rally to $1,309.00 so far today and above this strong resistance area at 200-Day MA, turns asset’s picture from neutral to positive. A confirmed signs however for a long-term upside momentum should be given, if the metal manage to hold today above $1,307.00.

The Technical intra-day picture, based on the 4-hour chart, turned positive, as RSI slopes above 60 for the 1st time since March 24, while MACD turns positive above its triggered line. The Daily timeframe remain however mixed. In the daily chart, the XAUUSD broke above the upper Bollinger Bands pattern, after breaking the latest swing high, suggesting reversal of the downtrend identified since April 19. On the other hand, the momentum indicators present a neutral to positive picture, as the RSI moves above 50 zone for the 1st time since April. The MACD oscillator decreases within negative territory and above its signal live, signalling that negative pressure is running out of steam.

Hence, as positive momentum gaining the control of the XAUUSD, a close today above $1,307.00, should indicate that control is back to bulls and to signal an upwards movement towards $1,320.00 – $1,325.00 resistance levels. Oppositely if this resistance level holds once more, then this should imply that the negative pressure still holds and could indicate a swing back lower to $1,295.00-$1,300.00 area.

A closer look at today’s US data:

U.S. retail sales climbed 0.8% in May, and surged 0.9% excluding autos. The 0.2% increase in April sales was revised to 0.4%, and the 0.3% ex-auto rise was bumped to 0.4%. Sales excluding autos, gas, and building materials (which factors into GDP forecasts) increased 0.6% from 0.4% (revised from 0.3%). Motor vehicle and parts sales were up 0.5% from 0.2% previously (revised from 0.1%). Gas station sales jumped 2.0% after the prior 1.0% increase (revised from 0.8%). Building materials climbed 2.4% after dropping 0.8% previously (revised from 0.4%). Clothing sales increased 1.3%, with department sales 1.5% higher. Sporting goods sales declined 1.1%. This is a stronger than expected report and adds to expectations for a strong pick up in Q2 GDP.