- Greenback stays under pressure for the third straight day on Wednesday.
- Mixed market sentiment doesn’t allow safe-havens to make a decisive move.
The XAU/USD pair took advantage of the broad-based greenback weakness and advanced toward the upper limit of its 3-week old range. After touching a weekly high near $1302, the pair retraced a portion of its daily earnings and was last seen trading at $1299, where it was up 0.2% on the day.
The US Dollar Index, which failed to hold above the 94 handle yesterday, remained under pressure on Wednesday and edged lower toward mid-93s. Today’s data from the United States showed that the trade deficit dropped to $46.2 billion in April. However, a separate report revealed that the nonfarm productivity in the first quarter increased by 0.4% to miss the experts’ estimate of 0.6%.
On the other hand, major equity indexes in the United States started the day in a mixed manner and made it difficult for traditional safe-havens to continue to attract market demand. As of writing, the Dow Jones Industrial Average and the S&P 500 were up 0.5% and 0.1% respectively while the tech-heavy Nasdaq Composite Index was losing more than 0.7%.
Technical levels to consider
With a daily close above $1300 (psychological level), the troy ounce of the precious metal could extend its upside to $1308 (200-DMA) and $1315 (50-DMA). On the downside, supports are located at $1295 (20-DMA), $1290 (Jun. 4 low) and $1282 (May 2 low).
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