- Gold struggles to find direction on Monday.
- Risk-off mood offsets USD weakness.
The XAU/USD pair is struggling to make a decisive move in either direction on Monday and was last seen trading near $1222, where it was virtually unchanged on the day.
The data released by the National Association of Realtors on Monday showed that pending home sales increased by 0.9% in June to surpass the market estimate of 0.1%. Meanwhile, Dallas Fed announced that the Manufacturing Business Index edged down to 32.2 in July from 36.5 in June. The US Dollar Index didn’t show a notable reaction to these numbers and fell to a fresh session low at 94.26 before going into a consolidation phase near 94.30. Ahead of this week’s critical central bank events, it looks like investors will be staying on the sidelines to allow the markets to stay relatively quiet.
In the meantime, Wall Street is recording modest losses on the day to reflect a risk-off mood, which helps the precious metal show resilience against major currencies.
In the early trading hours of the Asian session, manufacturing & non-manufacturing PMI data will be released from China. A positive reading is likely to suggest that the world’s second-biggest economy is preserving its momentum and let the risk appetite be felt in the markets.
Technical outlook
The CCI indicator on the daily chart stays near the -100 mark for the pair, showing that sellers are still in control of the price action. On the upside, resistances for the pair align at $1227 (Jul. 27 high), $1235 (20-DMA) and $1245 (Jul. 16 high). On the other hand, supports are located at $1219 (daily low), $1211 (Jul. 19 low) and $1200 (psychological level).
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