Gold struggles to attract sustained demand despite a weaker USD
The USD index peaked at 113.90 before plunging on Thursday amid a broad sell-off despite stronger-than-expected US CPI data. The DXY slipped to the 112.15 area, staying on the defensive on Friday. As a result, the greenback turned negative on the weekly charts as traders opted to take some profit after another rally. As such, the EURUSD pair rallied from 0.9630 to regain the 0.9700 mark. The shared currency advanced to the 0.9800 area on Friday and was last seen flirting with the 20-DMA, today at 0.9790. Despite the bounce, the pair failed to regain parity during the latest rally. The European currency is unlikely to make a decisive break above the 1.00 handle any time soon, with downside risks persisting for the time being, especially as the prices struggle to regain the 20-DMA even as the USD demand has ebbed. The immediate support now arrives around 0.9735, followed by the 0.9700 mark.
The cable briefly jumped to 1.1280 before retreating marginally on Thursday. Still, the pair finished with solid gains, trying to preserve the upside bias ahead of the weekend. The pair has settled above 1.1300 since then, struggling for direction on Friday as the selling pressure surrounding the US dollar has eased. The pair is trying to stage recovery after five bearish sessions in a row, but the upside potential looks still limited. Earlier this month, the rally for the pair was capped by the 1.1500 figure, pushing the prices back below 1.1000. On the positive side, however, GBPUSD exceeded the 20-DMA during the recent rally and now needs to stay afloat. GBPUSD was last seen flirting with the 1.1330 figure, adding less than 0.1% on the day. Should the prices fail to stay above 1.1300 in the near term, the pair could retest the mentioned the mentioned moving average, today at 1.1144.
USDJPY has been rallying for the eighth session in a row on Friday. The pair exceeded the 147.00 figure for the first time in more than 30 years to extend the ascent to the 147.66 zone. The dollar was last seen changing hands around 147.40, up 0.12% on the day. The fact that the prices keep clinging to the upper end of the extended trading range suggests the greenback could extend the ascent despite overbought conditions. As such, the dollar continues to hold steady after the recent jump and could target fresh long-term highs in the near term. Now, USDJPY needs to confirm a break above 147.00 on a daily and weekly closing basis and refrain from a major retreat amid overbought conditions. On the downside, the immediate support now arrives at 147.00, followed by the 146.40 figure. On the four-hour timeframes, the RSI stays resilient in overbought territory, with the overall technical picture looking strongly bullish.
Gold prices briefly dipped from $1,680 to touch fresh October lows around $1,642 during the volatile session on Thursday. The XAUUSD pair finished in the $1,665 area to turn slightly positive on Friday. Still, the precious metal struggles to regain the 20-DMA that has been in the market focus this month. The bullion was last seen changing hands just below $1,670, flirting with the mentioned moving average. On the four-hour timeframes, gold is also stuck between the key SMAs, struggling for direction after a brief plunge. In a wider picture, the yellow metal stays depressed, losing ground for the seventh month in a row while also holding just slightly above April 2020 lows seen last month around $1,614. A failure to hold above the $1,700 psychological level confirms the dominating selling pressure surrounding gold.