The XAU/USD pair is currently trading at $2,035, up by 0.52%. After two consecutive sessions of losses, the bulls are showing signs of recovery, supported by a weakened US Dollar. On the hourly chart, indicator readings are pausing their advance to consolidate gains while still maintaining control of the daily chart as buyers have recovered the 20-day SMA.
In Tuesday’s session, the XAU/USD surged to $2,035, reaffirming its bullish scenario in the daily chart. Despite central banks evading sooner rate cuts, the dominance of the bulls is favored by lower US Treasury yields. This is often seen as the cost of holding non-yielding metals. However, on the hourly outlook, investors are consolidating gains, leading to a loss in momentum, as indicated by weakened technical indicators.
Looking at the signals on the daily chart, the bull’s strength prevails. The positive upslope of the Relative Strength Index (RSI) and the increasing green histogram bars of the Moving Average Convergence Divergence (MACD) suggest a strong buying momentum. Additionally, the price is trading above its 20, 100, and 200-day Simple Moving Averages (SMAs), indicating the dominance of buyers in the longer-term trend. As long as the buyers hold above the 20-day average, the outlook will remain positive for the short-term.
Shifting focus to the hourly chart, the momentum seems to show some exhaustion as investors consolidate their gains. This suggests that unless a fundamental stimulus arises, the price may continue trading flat ahead of Wednesday’s Asian session.
Insight: The XAU/USD pair is currently showing bullish momentum in the daily chart, supported by positive technical indicators and dominance of buyers in the longer-term trend. However, the hourly chart indicates a potential loss in momentum as investors consolidate their gains. It will be important to monitor any fundamental stimulus that may impact the price movement in the short term. Additionally, the recovery of the 20-day SMA by buyers is a key level to watch for those tracking the XAU/USD pair.
