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XAU/USD Current price: 2,032.51
- United States data fueled demand for the US Dollar ahead of the Federal Reserve’s announcement.
- The US Treasury reduced its federal borrowing estimate for 1Q 2024 to $760 billion.
- XAU/USD keeps grinding higher, with buyers slowly recovering their confidence.
The US Dollar is once again appreciating during the American session, resulting in XAU/USD retreating from a fresh weekly high of $2,048.64 achieved following the release of United States (US) data.
The country reported that the number of job openings on the last business day of December stood at 9.02 million, according to the US Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey (JOLTS), higher than the 8.92 million openings reported in November. Additionally, CB announced Consumer Sentiment rose to 114.8 in January, its highest in over two years.
The USD is firmer despite a sharp slide in government bond yields. Markets welcomed news from the US Treasury, as the organism reduced its federal borrowing estimate for 1Q 2024 to $760 billion, down from a previous $816 billion estimate. However, Wall Street trimmed previous gains, with major indexes trading mixed around their opening levels.
Finally, caution prevails as speculative interest awaits the US Federal Reserve (Fed) monetary policy decision. The central bank will likely keep interest rates on hold, although market players will be looking for clues on upcoming rate cuts. In the latest dot plot, Fed officials anticipated three rate cuts this year, with money markets looking at March for the first trim. Policymakers have been conservative on the date issue, refusing to confirm when they could pull the trigger.
XAU/USD short-term technical outlook
The daily chart shows XAU/USD trades in the green for a second consecutive day as buyers gain confidence. The bright metal stands above a mildly bearish 20 Simple Moving Average (SMA) for the first time in over two weeks, while the longer moving averages remain far below the current level, with the 100 SMA advancing above a flat 200 SMA. Technical indicators, in the meantime, crossed their midlines into positive territory but lacks strength enough to confirm a bullish extension.
The 4-hour chart shows that XAU/USD was quite volatile around the release of US data but trades pretty much unchanged from pre-release levels. The 20 SMA gains upward traction below the current level and below a flat 100 SMA, while the price currently battles with the 200 SMA. Finally, technical indicators hold within positive levels, although without directional strength, failing to provide fresh clues.
Support levels: 2,019.20 2,010.00 2,001.60
Resistance levels: 2,040.30 2,052.60 2,064.15
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