XAU/USD pair
Gold prices in terms of US dollar (XAU/USD) witnessed sharp moves on Friday, dropping to fresh five year lows at 1076.77 only to recover and settle the day in the green at 1098.86. The XAU pair dipped to a new multi-year low after Thursday’s stronger US jobs data boosted the greenback earlier in the day. However, the US currency reversed gains and was heavily sold-off on disappointing US home sales data, driving XAU/USD above 1100 levels.
A for today’s trade in running, XAU/USD stalled its recovery and treads water near 1097, having faced rejection at 1099.23 levels. The pair trades modestly flat awaiting fresh incentives from the upcoming US economic data due later in the New York session. June durable goods orders will be reported later today with Wall Street analysts expecting a solid 3% rebound in total orders. This data will be closely watched by the Fed before the policy makers gather this week for the FOMC decision.
Technically, XAU/USD looks for direction as it has formed a small doji on the daily charts while the daily RSI at 22.60 has almost turned flat also confirming that traders are awaiting fresh cues. The pair is seen struggling to hold above 5-DMA located at 1096.20 and a better durable goods print expected today only points towards further downside bias. To the downside, the pair could drop to 1087 (near July 22-23 lows), below which floors would once again open up for a test of 1076.77 – fresh five year lows. However, if the data surprises market on the downside, we could see XAU/USD inching higher towards 1109.93 (July 21 High) beyond which 10-DMA located at 1116 could be eyed.
XAU/EUR pair
Gold prices in terms of Euro (XAU/EUR) ended in the positive territory at 996.24 on Friday, after five consecutive days of decline mainly driven by broad based XAU sell-off. The pair rebounded on Friday after the EUR/USD once again failed to conquer 1.10 handle, offering some respite to the XAU/EUR pair. Moreover, the pair also mirrored the recovery in XAU/USD supported by tepid US housing data.
Currently, XAU/EUR resumes its downward spiral and remains capped below 1000 – key psychological levels. The pair reversed previous gains and fell in Asia largely on the back of broad euro strength. EUR/USD regained 1.10 barrier and remains firmly bid on Greek optimism and falling US dollar with traders wary ahead of an eventful week.
Technically, XAU/EUR looks to wipe-off losses seen in Asia and may continue its recovery mode later in the session as the daily RSI at 28 has inched higher. Hence, to the upside, immediate resistance lies at 1000 levels above which 1005-1007 levels could be retested. A breach of the last will pave the way for a test of the next 10-DMA resistance located at 1020 levels. While to the downside, the pair could retest 995.38 (July 22 Low), below which floors open for a test of 989.20 (Jan 5 Low).
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