- XAU/USD touches new 2018 low at $1236 on Friday.
- Wall Street starts the day slightly higher, struggles to gain traction.
- US Dollar Index consolidates daily gains after touching 95.
After recording modest recovery gains on Thursday, the XAU/USD pair reversed its course on Friday and dropped to its lowest level since December at $1236 as the greenback continued to gather strength. In the second half of the day, however, the pair retraced a portion of its losses and was last seen trading at $1242, where it was still down $5, or 0.4%, on the day.
The pair's price action on Friday seems to be dominated by the greenback valuation. The US Dollar Index, which closed every day of the week in the positive territory, extended its upside to a fresh 2-week high at 95 on Friday. However, the index lost its traction in the early NA session and started to erase its gains, helping the XAU/USD pair pull away from lows. At the moment, the index is up only 0.06% at 94.63.
The data from the United States on Friday showed that the preliminary reading of the University of Michigan's Consumer Sentiment Index fell to 97.1 to fall short of the market expectation of 98.2. The report highlighted rising concerns about the potential negative impact of the Trump administration's trade policy on the economy.
In the meantime, following mixed earnings reports from big financial institutions in the United States, major equity indexes stay relatively calm during the first half of the session with the Dow Jones Industrial Average and the S&P 500 adding 0.3% and 0.15% respectively.
If the pair closes the week around where it's currently trading, it will record its fourth negative closing on a weekly basis in the last five weeks.
Technical levels to consider
On the upside, the initial resistance aligns at $1256 (Jul. 11 high/20-DMA) ahead of $1265 (Jul. 9 high) and $1278 (50-DMA). On the downside, supports align at $1241/39 (daily low/Jul. 2 low), $1234 (200-WMA) and $1228 (Jul. 16, 2017, low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.