Gold Price Analysis: XAU/USD challenges 100-SMA support again ahead of US data

Gold (XAU/USD) has returned to the red zone in the European session, having attempted a tepid bounce earlier in the Asian trading.

The US dollar resumes a recent uptrend and hits fresh two-week highs against its six major peers, despite the risk-on action in the European indices and positive US stock futures.

The uptick in the US Treasury yields also exerts additional downside pressure on the yieldless gold, as traders await fresh cues from the US ADP and ISM Services PMI reports for the next direction.

Gold: Technical outlook

Having faced rejection near $1784 earlier in the day, gold sellers fought back control and knocked off the rates below strong support at $1778.

At that level, the 21-simple moving average (SMA) coincides with the 50-SMA.

Gold Price Chart: Four-hour  

Subsequently, the bears tested the 100-SMA support at $1773 once again. A four-hourly closing below the latter is likely to expose Tuesday’s low of $1770.

April 29 low at $1765 will be the next cap, cushioning the downside.

The Relative Strength Index (RSI) edges lower below the midline, allowing more room for losses.

Alternatively, the buyers need to recapture the $1778 support-turned-resistance, in order to revive the bullish momentum towards the $1800 mark.

Ahead of that crucial round figure, the previous week high of $1790 could test the bullish commitments.

Gold: Additional levels