Gold: 100-hour MA is capping recovery rally despite signs of weakness in USD

• Gold’s recovery rally has stalled despite the signs of weakness in the US dollar.  
• The technical  outlook would turn bullish above $1,300.

Gold is struggling to beat key hurdle despite the signs of bullish exhaustion in the dollar index – gold’s biggest nemesis.  

The downward sloping (bearish) 100-hour moving average (MA), currently at $1,285.66, is putting brakes on the recovery rally.  

Moreover, the MA hurdle is holding strong even though the US dollar is feeling the pull of gravity. For instance, the AUD/USD has recovered from two-week lows reached earlier today. The USD/CNH pair fell from 6.8157 to 6.80 in the last few minutes.  

Further, the EUR/USD pair is currently trading at 1.1365 – up 29 pips from the low of 1.1336 reached yesterday.  

Notably, the dollar index, which tracks the value of the greenback against majors, has charted back-to-back doji candles on the daily chart. That candlestick pattern represents bullish exhaustion – the market has turned indecisive after an almost 150-pip rally.  

Looking forward, the yellow metal could rise well above the 100-hour MA. The outlook, however, would turn bullish only above $1,300. Moreover, the bearish view put forward by Friday’s range breakdown is still intact.  

Gold Technical Levels