FXStreet (Barcelona) - FXStreet Editor and Analyst, Dhwani Mehta, sees further downside potential for XAU/USD as USD recovers, but the downside view would be negated on a move above 1198.
Key Quotes
“Currently, XAU/USD languishes near lows around 1192 levels, having broken below critical support at 50-DMA placed at 1193.39, as the US dollar shows some signs of recovery following a big drop in the previous session on downbeat US macro data. The DXY recovers to 97.71 from previous lows of 97.33.”
“The pair may edge lower in the day ahead on a corrective slide also as the pair trades below all the moving averages. Further, the daily RSI at 47.70 in the bear range aims lower suggesting more room for decline.”
“Hence, the pair is expected to drop further and may retest fresh weekly lows at 1184.32 scored in the previous session.”
“However, with the major US data including durable goods on cards later in the NA session, gold may take further cues on the US data which may have major impact on the greenback.”
“On the contrary, a sustained break above 50-DMA, may push the pair higher a retest of previous highs at 1198.07 and beyond that at 1200 – psychological levels.”
“Overall, the pair may keep the range to the downside and a break above 1198 levels will only confirm bullish momentum.”