XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) bounced-off fresh two week lows reached at 1179.97 and closed slightly higher on Thursday at 1188.81 levels. Gold prices saw huge volatility, swinging between gains and losses closely tracking USD moves. XAU/USD remained below all the major moving averages and dipped to lows after the greenback spiked following the release of US pending home sales data which soared to 9-yr highs adding to the recent run of upbeat US fundamentals and fuelling increased Fed rate0hike bets.
XAU/USD trades in a flat-lining around 1188 levels awaiting fresh cues from the upcoming second estimate of the Q1 U GDP figures due later today. Moreover, Chicago PMI and consumer sentiment form the US will also be closely watched for further impacts on the greenback and thereby on the yellow metal. The daily RSI has turned dead flat at 43.41, indicating lack of clear direction ahead of US Data release. The pair has also formed a small doji candle underscoring a wait-and- see approach, building momentum before the key data.
US GDP is forecasted to show -0.9% contraction in the Q1 2015, opposed to 0.2% rise shown in the first estimate. Hence, gold prices may extend higher in case the data comes worse-than expectations and retest 1200 levels, breaking past 5-DMA and 50-DMA upside barriers. In case the GDP print comes in line with expectations or above estimates than USD bulls may jump back into the bids, dragging XAU lower a retest of the channel trend line at 1183.17. Below a break of the last, the pair could extend declines to 1179.97 (May 28 Low) levels. A fresh sell-off could trigger below a breach of previous lows pushing the pair lower to 1169-1168.50 support zone.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) extended its losing streak and settled near lows on Thursday at 1084.44 levels. The pair edged lower and breached the trend line resistance support placed at 1084.77 largely on the back of a generalized strength seen in the euro as markets hoped on a Greek deal being reached. The pair failed to breach the strong resistance at 100-DMA located at 1092.1 and rebounded lower hitting fresh weekly lows at 1082.49.
At the moment, XAU/EUR clinches on to the trend line support of 1083.68 and struggles to sustain above it. The pair seems testing lows as the shared currency spiked to fresh highs at 1.0975 versus the US dollar back by upbeat German retail sales m/m data. Moreover, a broadly weaker US dollar in anticipation of weaker US GDP print also boosted the EUR bulls, eventually weighing on XAU/EUR. The daily RSI is stuck to mid lines and trades dead flat indicating a potential break out on either side in making. However, observing the daily charts, it seems that the pair may give a bearish breakout with the pair declining to 20-DMA located at 1076 levels. To the upside, the pair faces immediate resistance at 10-DMA placed at 1088.70. Hence a break above the last the pair faces above the strong resistance around 1090-1093 levels where 5-DMA, 100-DMA and 50-DMA lie. Only a convincing break above 50-DMA at 1093 will confirm bullish momentum.
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