Gold stays afloat despite a widespread ascent in the dollar
The dollar rallies across the board as USD bulls are cheering the Fed’s hawkish message. Minutes of the Fed’s July meeting indicated that most officials thought it was appropriate to begin reducing the pace of asset purchases this year. Against this backdrop, EURUSD failed to hold above the 1.1700 figure to register early-November lows around 1.1665 before bouncing slightly. The pair was last seen changing hands just below the 1.1700 figure, down 0.15% for the day. Despite the recent bounce, the common currency remains on the defensive and could come under more intense pressure if the prices stay below the 1.1715 region in the near term. On the downside, a break below the mentioned lows would pave the way towards the 1.1600 figure.
The cable fell to nearly one-month lows on Thursday amid the rallying dollar. The pair dipped to the 1.3665 region as the 1.3700 figure failed to withstand the pressure. Now, the pound has settled below the key moving averages, adding to a downbeat technical picture. If the downside pressure persists in the short term, the prices would target the 1.3650 area, followed by the 1.3610-1.3600 region. On the hourly timeframes, the RSI is correcting from the oversold territory but there are no solid recovery attempts so far. It looks like the cable would stay on the defensive for the time being as the dollar looks set to notch fresh highs before correcting lower.
USDJPY extended gains to the 110.20 region earlier in the day but failed to preserve gains as the upside momentum has waned during the European hours. The pair retreated to the 109.50 region and was last seen changing hands around 109.70, just 0.02% lower for the day. The pair is now stuck between the 20- and 100-DMAs. If the overall upside pressure surrounding the dollar eases anytime soon, the pair would get back under the 109.50 region to retarget the 109.10 level where this week’s lows arrive. On the four-hour charts, there are some recovery attempts but the upside potential looks limited at this stage. In s wider picture, the dollar is flirting with the 20-week SMA while the RSI looks directionless in the neutral territory.
Gold prices have been treading water around the 20-DMA this week, struggling for direction. Of note, the bullion stays afloat despite a widespread rally in the greenback. The yellow metal is capped by the mentioned moving average which represents the immediate barrier on the way towards the $1,800 figure. On the downside, the immediate support arrives at $1,775, followed by the $1,750 region. On the four-hour charts, the XAUUSD pair needs to overcome the 200-DMA around $1,795 in order to see a directional impetus in the short term. So far, the technical picture remains neutral, with the daily RSI directionless around the 50 figure. In a wider picture, the XAUUSD pair needs to break above the ascending 20-week SMA, today at $1,809 in order to see a more sustained bullish bias.