XAU/USD outlook: Bulls to remain in play above $2,600

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold price rose to the highest since Oct 4 on Monday, in extension of strong rally last Thu/Fri, inflated by the latest decision by China to further boost its stimulus to the economy.

The news sparked fresh risk aversion by signal that Chinese economic growth is stalling, giving fresh boost to safe-haven demand however, technical picture is not so encouraging.

Daily studies are mixed as MA’s turned to bullish setup, but 14-d momentum is heading south and cracking the centreline.

Double-Doji on weekly chart adds to signals of indecision (although long tails and dips contained by psychological $2600 support suggest that bids are still strong), along with overbought stochastic and fading bullish momentum, while WMA’s remain in bullish configuration.

Market focus will remain on Fed, as investors expect more details about the central bank’s next steps on monetary policy, which will be likely one of key drivers of the yellow metal.

Larger bulls are expected to remain fully in play if current consolidation under new all-time high stays above $2600 support.

Near-term action faces solid support at $2636 (daily Tenkan-sen), holding above which to keep immediate bias with bulls and guard $2600 support.

Res: 2666; 2673; 2685; 2700.

Sup: 2643; 2636; 2622; 2602.

Interested in XAU/USD technicals? Check out the key levels

1. R3 2686.56
2. R2 2676.71
3. R1 2662.87
PP 2653.02
1. S1 2639.18
2. S2 2629.33
3. S3 2615.49

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD extends decline as weak jobs data bolsters BoE rate cut bets

The Pound Sterling continued to backslide under sustained pressure on Wednesday, following through after the UK employment report on Tuesday showed a labour market deteriorating faster than expected.

Gold rises above $4,950 as US-Iran tensions boost safe-haven demand

Gold price holds positive ground near $4,985 during the early Asian session on Thursday. The precious metal recovers amid shifts in geopolitical sentiment, boosting safe-haven demand. Traders will keep an eye on the release of US Initial Jobless Claims, Pending Home Sales data, and the Fedspeak later on Thursday.

Australia unemployment rate set to edge up within overall strong labor market

The Australian monthly employment report is scheduled for release on Thursday at 00:30 GMT, and market participants anticipate a modest increase in jobs in January. The Australian Bureau of Statistics is expected to announce that the country added 20K new jobs in the month, while the Unemployment Rate is forecast at 4.2%, up from the 4.1% posted in December.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.