XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) almost unchanged on Wednesday at 1209.96 levels, having spiked to fresh daily highs at 1213.40. The pair pierced through the 100-DMA support-turned resistance and printed daily highs in the NA session after Fed’s minutes release which revealed that a June rate hike is unlikely while the document sounded slightly downbeat on the heath of US economy, which knocked-off the USD across the board.
Currently, XAU/USD remains supported above the 10-DMA support placed at 1207.80, while the upside seems capped by 100-DMA resistance located at 1212.80. The pair extends its post-FOMC minutes upside bias as the greenback remains broadly weak while markets continue to absorb the Fed minutes. The daily RSI has inched higher slightly indicating likelihood of further upward moves. To the upside, the pair may retest 100-DMA and daily highs confluence at 1212.80. A break above the last, XAU bulls may extend to the next resistance located at 5-DMA and 200-DMA convergence around 1215.50. Only a convincing break above 200-DMA, may drive the pair higher towards a test of 1220 levels and beyond. To the downside, a break below 10-DMA, the pair could drop sharply to 1203.20 (May 20 Low) levels and below that may test the crucial psychological level at 1200. However, further direction on the pair may shape on the release of a host of US macro data due later today.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) closed higher on Wednesday at 1089.97 levels and did manage to give a Symmetrical triangle bullish breakout. However, the pair failed to extend higher as the 50-DMA resistance located at 1093.32 capped the upside. Subsequently, XAU/EUR rebounded lower to settle the day well above the 100-DMA support of 1086.66. The gains in the pair were capped by a strengthening EUR/USD after Fed’s minutes pushed the greenback lower.
At the moment, the pair trades at 1089.91 and seems to have formed a small doji on the daily charts, indicating no clear direction set on the pair. The pair finds good support at 100-DMA placed at 1087.70 and appears to be struggling at higher levels to surpass the 50-DMA critical resistance located at 1093.40. Markets now shift their focus towards a flurry of services and manufacturing PMIs across the Euro area economies followed by ECB meeting accounts due later this session for fresh incentives. Meanwhile, the daily RSI at 54 aims mildly lower suggesting the pair could drop for a retest of 100-DMA support. A break below the last, XAU bears may take over and drag the pair lower to the 5-DMA support located at 1082.85 levels. In case of a failure to breach 100-DMA, the pair may rebound higher in yet another attempt to finally breach 50-DMA. The XAU/EUR pair may be little affected by EZ PMIs and ECB minutes as the broad USD moves are likely to dominate the session ahead.
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