Gold witnessed an intraday pullback from the fresh multi-month high set earlier this Tuesday.Modest USD strength undermined the commodity amid a recovery in the global equity markets.
Geopolitical risks warrant some caution before confirming that the XAU/USD has topped out.Gold struggled to capitalize on its early modest gains to the highest level since early June 2021 and witnessed an intraday turnaround from the $1,914 region. The retracement slide extended through the first half of the European session and dragged spot prices below the $1,900 mark, though lacked follow-through. The sharp pullback could be attributed to some profit-taking amid a pickup in demand for the US dollar, which tends to undermine the dollar-denominated commodity.
Technical Outlook….From a technical perspective, slightly overbought RSI (14) on the daily chart seems to be the key factor that has prompted traders to lighten their bullish bets. Hence, any subsequent decline might still be seen as a buying opportunity near the $1,888-$1,887 region. This should help limit the downside near the $1,880-$1,877 horizontal zone. Failure to defend the said support levels could pave the way for an extension of the corrective slide towards the $1,855-$1,853 zone. The latter marks a downward-sloping trend-line resistance breakpoint, extending from June 2021, and should act as a strong base for gold prices.
On the flip side, bulls might now wait for some follow-through buying beyond June 2021 high, around the $1,916 region before placing fresh bets. Gold could then accelerate the momentum and climb to the next relevant hurdle near the $1,930-$1.932 area.
EUR/USD edges higher above 1.1300 on upbeat IFO data
EUR/USD regained its traction during the European trading hours and climbed above 1.1330. Although the market mood remains cautious, the upbeat IFO sentiment data from Germany seems to be helping the shared currency find demand. Investors eye geopolitical headlines surrounding the Russia-Ukraine crisis.
EUR/USD News
GBP/USD fell below 1.3560 but managed to stage a rebound toward 1.3600 in the early European session. British Prime Minister Boris Johson is expected to announce sanctions against Russia later in the day. The US economic docket will feature Markit PMI data.
GBP/USD fell below 1.3560 but managed to stage a rebound toward 1.3600 in the early European session. British Prime Minister Boris Johson is expected to announce sanctions against Russia later in the day. The US economic docket will feature Markit PMI data.
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