XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) extended its bearish momentum and tested the descending triangle trend line support at 1170 levels. The pair finally bounced-off lows and averted a bearish breakout, settling the day at 1175.51 levels. Gold prices tumbled to fresh two week lows as the US dollar was broadly boosted following the release of in line with estimates US final Q1 GDP data. While no show at Euro group meeting on Greece also kept the yellow metal in red.
As for today’s trade so far, XAU/USD extends minor recovery near 1176.50 levels as the US dollar gave back all of its previous gains and trades muted as traders anticipate a Greek solution to be struck at last at today’s Euro group meeting. This may keep the USD largely subdued on rising EUR/USD. Hence gold prices may receive some respite and extend higher to 1180.25 (June 24 High). A break above the last the pair may inch towards the confluence zone of 5-DMA and 20-DMA located around 1183.30-1183.90 levels. The daily RSI at 42.50 reversed downtrend and has turned higher suggesting recovery likely to be extended. However, in case the Fed’s inflation gauge and weekly jobless claims due later today tops estimates, then we could see a pullback gold, once again testing the key support at 1170 below which the pair could drop to 1161.29 (June 5 Low) levels.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) faced rejection at the strong 20-DMA resistance yet another time and rebounded lower to end Wednesday in red at 1048.98. The pair breached the 10-DMA support at 1051 levels and edged lower mainly driven by broad euro strength on Greek hopes. While generalized weakness in XAU cross also pressured the XAU/EUR pair.
XAU/EUR staged a mild rebound and trades higher around 1050 levels, with the upside challenged by 5-DMA and 10-DMA resistance zone near 1050.50-1051 levels. However, the recovery is expected to be short-lived as the European currency is expected to remain underpinned ahead of the Euro group meeting scheduled later today as markets expect a Greece deal to be finally struck. Hence the pair could reverse gains and fall back in red testing yesterday’s low at 1048.98 levels. A break below the last selling pressure may intensify dragging the pair 1045 support. However, to the upside, a break above 1051 levels, may expose upside risks towards 20-DMA critical resistance located at 1054.40 levels. Overall, it is expected that XAU/EUR may keep the familiar range below 1060 levels amid a data-empty European session ahead.
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