- Vaccine-led optimism downs DXY, lifts Gold towards $1800.
- 100-HMA seen capping the rebound in XAU/USD.
- All eyes on US data, Powell’s testimony and vaccine news.
Gold (XAU/USD) stalls its rebound from five-month lows of $1765 in the European session this Tuesday, as the 100-hourly moving average (HMA) guards the immediate upside near $1797.
Gold attempted a solid comeback after the recent sharp declines, mainly in response to the broad-based US dollar weakness, as the month-end dollar demand faded. The focus shifted back to the coronavirus vaccine-driven economic recovery hopes, which diminished the greenback’s safe-haven appeal.
Also, the continued escalation in the virus infections globally combined continues to cast a dark cloud on the economic prospects, lending support to gold’s recovery.
However, the XAU bulls now turn cautious ahead of the highly influential ISM Manufacturing PMI data and Fed Chair Jerome Powell’s testimony. Also, the risk-on action in the European equities and US stock futures caps the bounce in the non-yielding gold.
Gold Price Chart: Technical outlook
Gold charted a symmetrical triangle breakout on the hourly chart earlier in the Asian trades, having recaptured the 50-HMA at $1784. However, the bulls are facing strong resistance just below the 100-HMA barrier, as the Relative Strength Index (RSI) has turned south, near 65.50. However, the technical indicator still suggests that the recovery mode remains intact.
Alternatively, the 50-HMA support could offer an immediate reprieve to the bulls. A break below which the multi-month lows of $1765 could be back in play.
Gold: Additional levels
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