XAUUSD, H1
The Australian Dollar remains the strongest currency on the day out of the main currencies, presently a few pips off highs and showing a 0.7% advance on both the US Dollar and the Yen, which are the joint weakest currencies. A firmer Yuan and higher Global Stock markets have been a buying cue for higher beta assets and currencies, including the Australia Dollar. As Australia remains the major producer of gold, we have so far seen gold benefiting on Aussie’s strength.
Hence Gold Futures rallied to better than 2-week highs of $1,266.90, before easing back to current $1,262 levels. The contract bottomed at $1,255.90 in overnight trade, while the move higher came as the Dollar fell, taking the USDIndex to levels last seen on June 14. Despite the slight weakness noticed the last 3 hours, the instrument remains above day’s R2, with 5-period EMA sloping above the 9-period EMA, confirming the continuation of the positive momentum.
The technical intraday picture, based on the 1-hour chart, complies with the bullish move. RSI dropped at 63 but it is currently pointing towards 70 barrier again. MACD increases within positive territory and above its signal line, signalling that bulls remain in control. Next Resistance is at 1264.50 and Support area between the latest up fractal in the hourly chart and the 20-period MA, at $1,259.60-$1,261.00. A break below this support area could imply a retest of Friday’s lows at$1,252.20-$1,255.56 (i.e. PP level and Friday’s low) .
The daily timeframe continues to support the bearish outlook of XAUUSD, since MACD holds in the negative terittory and RSI is moving below neutral. Only a close above the confluence of the 20-Day MA and 23.6% Fib. level since April 11($1,266.70), could open the door for a test of $1,280.00 in the near term.
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Andria Pichidi
Market Analyst
HotForex
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