XAU/USD pair – Daily Chart
Gold prices in terms of US dollar (XAU/USD) traded both side on Wednesday, finally ending the day lower at 1202.27. Gold prices remain resilient above 1200 levels, giving a sustained close above that level over the past one week. XAU/USD dipped briefly below 1200 threshold as the US dollar hit a fresh twelve year high. However, gold bulls quickly took charge and regain 1200 levels after US jobs data missed market expectations. Moreover, a risk-off sentiment amid falling major currencies and global equities also boosted the safe-haven demand for gold, keeping XAU/USD underpinned.
Currently, the pair trades higher at 1204.34 levels and faces stiff resistance at 10-DMA located at 1205.77 levels. Gold prices are expected to remain buoyed largely on risk-aversion with the daily RSI ticked upwards at 40.05 backing the case for an upside in the making. A break above 10-DMA, the pair may face immediate upside barrier at 5-DMA located at 1206.34 levels. Beyond 5-DMA, the pair may sail smoothly towards the confluence of 20-DMA and 100-DMA around 1215 levels, forming a dense resistance there. The persistent strength in the US dollar may cap the upside and XAU/USD is expected to bounce-off 1215 levels and fall back to crucial support at USD 1200 levels. Overall, the pair is likely to remain underpinned above 1200 levels ahead of US unemployment claims figures and further upside for the pair is likely with a break above 100-DMA.
XAU/EUR pair – Daily Chart
Gold prices in terms of Euro (XAU/EUR) finished higher on Wednesday at 1085.07 levels, holding above the critical support at 20-DMA placed at 1076.35. XAU/EUR advanced as the euro tumbled to fresh twelve year lows against the greenback at 1.1060 levels, as traders remained wary on the implementation of the QE program ahead of ECB meeting later today. Moreover, a set of mixed PMI readings across the Euro area economies and also the EMU retail sales numbers dented investors’ sentiment, adding further pressure on the Euro.
Currently, the pair trades near fresh highs at 1088.91 levels, firmly bid above 5-DMA located at 1082.73 levels. XAU is likely to climb higher as the euro is expected to test 1.100 psychological levels ahead of German industrial production and ECB Meeting due later in the day. The daily RSI standing at 55.21 levels in the bullish terrain also suggests more room for upside. The pair is likely to test previous highs at 1095 levels and beyond that test next resistance at 1100- psychological levels and XAU bulls may dominate thereon. Overall, a generalized intraday upside bias persists so long as pair holds above 20-DMA. Also, the shared currency is expected to be pressured as traders remain on the edge and may prefer to hold the reserve currency before the ECB Meeting.
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