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XAU/USD Current price: $1,779.26
- The ECB and the BOE hiked their benchmark rates by 50 bps as expected.
- Poor Chinese data fueled growth-related concerns and spurred demand for the USD.
- XAU/UD turned bearish in the near term, holds near a strong static resistance area at around $1,765.00.
Spot gold plummeted early Thursday, losing the $1,800 threshold and trading as low as $1,773.68 a troy ounce early in the European session. XAU/USD bounced from the mentioned low and recovered up to $1786.12 in the middle of the European central banks’ frenzy but quickly resumed its decline amid a risk-averse environment.
The market mood soured at the beginning of the day following the release of worse-than-anticipated Chinese data. The disappointing figures revived concerns about a potential global economic setback, fueling demand for the US Dollar. The latter also benefited from US Federal Reserve Chairman Jerome Powell’s words following the monetary policy announcement, as he was pretty hawkish. Market players did not immediately react to Powell’s comments, but once growth-related fears sunk in, they rushed into the greenback.
The Bank of England and the European Central Bank also announced monetary policy decisions, both hiking rates by 50 bps. However, the BOE was considered dovish, while the ECB was considered hawkish, as President Christine Lagarde said that “of course” more 50 bps are coming. Her hawkish words boosted the EUR and temporarily interrupted US Dollar’s appreciation, but Wall Street’s opening revived it.
XAU/USD price short-term technical outlook
The XAU/USD pair trades near the mentioned daily low, and the daily chart shows an increased bearish potential. The pair is back below a mildly bearish 200 SMA while pressuring a flat 20 SMA. Technical indicators, in the meantime, have turned firmly lower and approach their midlines from above.
In the near term, and according to the 4-hour chart, the risk skews to the downside. XAU/USD accelerated its decline after falling below the 20 SMA and is now struggling with the 100 SMA. The 200 SMA, in the meantime, loses its bullish strength far below the current level. Finally, technical indicators stand within negative levels and gaining bearish traction, in line with another leg south.
Support levels: 1,773.60 1,765.00 1,752.80
Resistance levels: 1,785.20 1,798.70 1,810.00
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