Gold remains on track to end the second day in a row higher above $1250
- European indices end the day in the red.
- Greenback further weakens on ECB headlines.
- Gold sticks to daily gains above $1250.
After recording its biggest daily percentage gain in over two months on Tuesday, the XAU/USD pair preserved its bullish momentum during the first half of the day on Wednesday and reached a fresh weekly high at $1261 before retracing a portion of its upside. As of writing, the pair was trading at $1257, adding a little over $4, or 0.32% on the day.
The pair took advantage of a weaker greenback and a negative market sentiment today. Major European indices in Europe recorded modest losses with Germany's DAX and the UK's FTSE indexes both closing the day 0.25% lower.
On the other hand, since failing to hold above the 95 handle, the US Dollar Index stayed directionless in the bottom half of its 3-week-old range below the 94.50 mark. Despite the thin market volume amid the Independence Day holiday in the U.S, the DXY pushed lower in the last hour.
A Bloomberg report claiming that some ECB members thought that a rate-hike in late 2019 would be too late triggered a small rally in the EUR/USD pair and weighed on the buck. At the moment, the index is down 0.15 on the day at 94.20.
Technical outlook
The CCI indicator on the daily chart stretched higher toward the 0 mark with today's rise, suggesting that sellers have lost control of the price action. However, it's still early to say a deeper recovery is eminent as the RSI on the same chart remains below the 50 handle. On the upside, the initial resistance for the pair could be seen at $1268 (20-DMA) ahead of $1276 (Jun. 20 low) and $1287 (50-DMA). On the downside, supports align at $1253 (daily low), $1245 (Jun. 28 low) and $1239 (Jul. 2 low).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
