Gold price has been on the back foot, despite the generally negative market mood, currently trading at around $1,745.80 a troy ounce. The metal bottomed at the beginning of the week at $1,727.70, as the dollar outperformed other safe-haven assets throughout the first half of the week. Nevertheless, the greenback got hit by poor US data released on Tuesday, pulling down from its recent highs and correcting extreme overbought conditions against most major rivals. The bright metal peaked at $1,754.07 but so far cannot retain the $1,750 mark, with sellers quickly appearing in attempts to surpass the level. XAU/USD is seen at a critical juncture as bull-bear tug-of-war could set in, FXStreet’s Dhwani Mehta reports.
Meanwhile, financial markets are relatively quiet at the moment as investors await the US Durable Goods Orders report, expected to post a modest 0.6% advance in July. Such a tepid report will likely exacerbate concerns about a recession and weigh on high-yielding assets. The dollar will likely resume its bullish momentum after the latest pullback and is seen strengthening against its brighten rival.
XAU/USD bears return after rejection above $1,750
“The 14-day Relative Strength Index (RSI) is turning south once again while below the midline, suggesting that the downside pressure could build up in the sessions ahead.”
“Adding credence to the bearish bias, the 50-Daily Moving Average (DMA) is fast approaching the 21 DMA from above.”
“A sustained break below the Fibonacci Retracement (Fibo) level of the recovery from yearly lows of $1,681 to the August 10 high of $1,808 at $1,729 will open up the downside towards the $1,700 mark.”
“Bulls need a daily closing above the $1,750 psychological level, above which the 38.2% Fibo resistance at $1,760 will be probed. Further up, the meeting point of the 21 and 50 DMAs at $1,769 will be a tough nut to crack for XAU bulls.”