XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) witnessed high volatility on Monday, spiking to 1187.15 before rebounding to session lows at 1173.81. The pair failed to sustain at higher levels and gave back entire gains, ending the day lower at 1179. XAU/USD breached the 5-DMA support at 1176.60 yesterday after Greece concerns eased a bit as traders remained hopeful of a deal being reached ahead of the June 30 deadline.
XAU/USD extends its downside momentum and trades near lows at 1175.22 levels, facing rejection around 1180 levels. The pair remains pressured amid rebounding Asian equities and strengthening US dollar while Greek risks continue to linger. Looking ahead, we have a slew of US macro releases which may further boost the USD bulls, dragging the pair even lower.
The daily RSI at 43 has turned sharply lower suggesting more southward moves ahead. Hence, to the downside, the pair could drop to 1173.81 (June 29 Low), below which floors would open for a retest of crucial 1170 levels. Selling pressure is likely to intensify below the last, dragging the pair to 1168 levels. In case, we see negative developments surrounding Greece in the day ahead, gold prices may receive some support and rebound higher towards 10-DMA and 20-DMA confluence zone around 1182-1183 levels. Beyond which the pair may climb higher for a retest of 1187.15 (June 29 High) levels.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) finally broke its consolidation channel on Monday and jumped to fresh week highs at 1081.06 in Asian trades as the euro traded near monthly lows near 1.10 handle as Greek fiasco over the weekend weighed on EUR/USD, supporting XAU/EUR. However, all the gains were shaved-off later in the European session and the pair plunged nearly EUR 40 to 1046.80 lows on a reversal in EUR/USD, swinging back above 1.1200 on SNB intervention as well as on Greek hopes. However, XAU/EUR, managed to reclaim 1050 levels at close.
In today trade in running, XAU/EUR has posed a minor recovery, supported at 1050 – key levels. The pair trades in a narrow range, currently trading 1052.20 levels. The pair edged higher today as the euro came under renewed selling pressure, following the latest Greece updates with Greek once again rejecting the last-minute deal opportunity offered by European Commission. In the day ahead, Euro zone CPI print may provide fresh cues on the EUR/USD pair, eventually impacting XAU/EUR. While Greece headlines will also be closely watched.
Technically, XAU/EUR clings to 1050 support where 5-DMA, 10-DMA and 20-DMA converge. The daily RSI has turned flattish at near 45 indicating no clear direction as traders await for more incentives from Greece or upcoming EZ data. Hence, a break below 1050 levels, the pair could slip to 1045-1044 strong support zones, below which further downside is likely towards trend line support located at 1038 levels. To the upside, 1055 levels acts as strong upside barrier, which may limit further upmoves in XAU/EUR.
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