- Risk-off mood weighs on stocks on Friday.
- US Dollar Index goes into a consolidation phase below 97.
- The XAU/USD pair is virtually unchanged on the week.
After dropping to the $1220 area earlier in the day amid broad-based USD strength, the XAU/USD pair staged a modest rebound in the second half of the day and was last seen trading at $1223, losing 0.35% on the day. On a weekly basis, the pair is virtually unchanged.
Since the start of the week, the pair struggled to make a decisive move in either direction as the weak market sentiment countered the higher demand for the USD. After rising to a fresh weekly high of 96.91 earlier in the day, the US Dollar Index lost its momentum and started consolidating its daily gains with thin trading conditions not allowing any sharp movements. The data released by the IHS Markit today showed that the business activity in both the manufacturing and service sectors in the United States expanded at a slower pace than expected in November. As of writing, the DXY was up 0.3% on the day at 96.80.
- US: Markit Manufacturing PMI falls to lowest level in 3 months at 55.4 vs 55.7 expected.
- US: Markit Services PMI drops to 54.4 in October from 54.8 in November.
On the other hand, the unstoppable crude oil sell-off weighed on the major equity indexes in the United States on Friday to suggest that investors are seeking refuge in safer assets ahead of the weekend. At the moment, the Dow Jones Industrial Average and the S&P 500 indexes are down 0.45% and 0.3% on a daily basis.
Technical levels to consider
The pair could face the first support at $1215 (50-DMA) ahead of $1206 (Nov. 9 low) and $1200 (psychological level). On the upside, resistances could be seen at $1230 (Nov. 21 high), $1236 /Nov. 7 high) and $1243 (Oct. 26 high).
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