XAU/USD outlook: Gold benefits from weaker dollar after US inflation data

Slobodan Drvenica Windsor Brokers

Gold

Spot gold edged higher on Friday and probed above $1900 barrier, inflated by weaker dollar after signals that rising US inflation, which made a biggest annual increase almost 13 years, was insufficient to push Fed to start changing its stance over ultra-loose monetary policy.

The US central bank expected to signal a strategy of a gradual reduction of its massive bond-buying program probably in August or September policy meeting, but is unlikely to act until early 2022 that leaves a plenty of space for the yellow metal to rise.

Fresh attempts higher need a clear break of $1900 zone (bear-trendline off $1916, June 1high/Fibo 76.4% of $1916/$1855 bear-leg) to complete bullish wedge pattern on daily chart and signal an end of $$1916/$1855 corrective phase.

Bullish daily studies underpin the action which looks for clear break of $1900 zone to focus next key barrier at $1922 (Fibo 61.8% of $2074/$1676 pullback), with break here to signal reversal of the downtrend from $2074 all-time high).

Caution of overbought weekly stochastic which signals prolonged consolidation.

Initial support lays at $1889 (rising 20DMA/session low), with near-term bulls expected to remain in play while the price action holds above the lower wedge pattern boundary ($1874).

Res: 1903; 1916; 1922; 1928.
Sup: 1889; 1885; 1874; 1864.

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

1. R3 1938.93
2. R2 1919.44
3. R1 1908.83
PP 1889.34
1. S1 1878.73
2. S2 1859.24
3. S3 1848.63

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 flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.