Gold: 100-hour MA is capping recovery rally despite signs of weakness in USD

Gold's recovery rally has stalled despite the signs of weakness in the US dollar.
The technical outlook would turn bullish above $1,300.

Omkar Godbole FXStreet Contributor

Gold is struggling to beat key hurdle despite the signs of bullish exhaustion in the dollar index - gold's biggest nemesis.

The downward sloping (bearish) 100-hour moving average (MA), currently at $1,285.66, is putting brakes on the recovery rally.

Moreover, the MA hurdle is holding strong even though the US dollar is feeling the pull of gravity. For instance, the AUD/USD has recovered from two-week lows reached earlier today. The USD/CNH pair fell from 6.8157 to 6.80 in the last few minutes.

Further, the EUR/USD pair is currently trading at 1.1365 - up 29 pips from the low of 1.1336 reached yesterday.

Notably, the dollar index, which tracks the value of the greenback against majors, has charted back-to-back doji candles on the daily chart. That candlestick pattern represents bullish exhaustion - the market has turned indecisive after an almost 150-pip rally.

Looking forward, the yellow metal could rise well above the 100-hour MA. The outlook, however, would turn bullish only above $1,300. Moreover, the bearish view put forward by Friday's range breakdown is still intact.

Gold Technical Levels

XAU/USD

Overview:
    Today Last Price: 1285.13
    Today Daily change: 0.63 pips
    Today Daily change %: 0.05%
    Today Daily Open: 1284.5
Trends:
    Daily SMA20: 1284.95
    Daily SMA50: 1255.59
    Daily SMA100: 1234.62
    Daily SMA200: 1228.59
Levels:
    Previous Daily High: 1285.65
    Previous Daily Low: 1277.5
    Previous Weekly High: 1295.9
    Previous Weekly Low: 1276.2
    Previous Monthly High: 1284.7
    Previous Monthly Low: 1221.39
    Daily Fibonacci 38.2%: 1282.54
    Daily Fibonacci 61.8%: 1280.61
    Daily Pivot Point S1: 1279.45
    Daily Pivot Point S2: 1274.4
    Daily Pivot Point S3: 1271.3
    Daily Pivot Point R1: 1287.6
    Daily Pivot Point R2: 1290.7
    Daily Pivot Point R3: 1295.75

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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