XAU/USD outlook: Gold price rises on concerns from weak US data

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold price rises for the fourth consecutive day, extending recovery from a multi-week low at $1892 (June 29), after larger bears failed to clearly break psychological $1900 support and left a bear-trap.

Gold was inflated by growing expectations that the Fed may decide to pull the break and further pause its hiking cycle, as recent series of weaker than expected US economic data, warning that high interest rates may have impacted economic growth more than anticipated.

Traders wait for more cues from Fed minutes and US labor sector reports, due in coming sessions.

Technical picture improved on daily chart, but remains predominantly bearish, as 14-d momentum is still in negative territory, with sustained break of initial barriers at $1937/38 (Fibo 23.6% of $2080/$1892/ daily Kijun-sen) seen as minimum requirement to keep fresh bulls in play.

Today’s daily cloud twist could also attract bulls, though limited impact is likely on holiday-thinned markets.

Daily Tenkan-sen marks pivotal support at $1915, loss of which to revive bears for renewed attack at $1900 zone.

Res: 1931; 1938; 1945; 1964.

Sup: 1919; 1915; 1909; 1900.

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

1. R3 1941.23
2. R2 1935.99
3. R1 1930.41
PP 1925.17
1. S1 1919.59
2. S2 1914.35
3. S3 1908.77

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 faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.