Intraday Analysis – Gold may break higher

USDCHF struggles for bids

The US dollar tries to stabilise after the market saw a low probability of further interest rate increases after July. The sell-off seems to be slowing down after the RSI repeatedly showed a deeply oversold greenback. An oversold RSI on the daily chart is another sign of exhaustion and could cause a snapback if sellers start to take some chips off the table. Trend followers are likely to be waiting to sell into strength and 0.8700 would be the first area to probe for resistance. 0.8550 is the closest level to see if the bleeding would stop.

EURGBP tests key resistance

The pound pulls lower as traders reposition ahead of the UK’s CPI on Wednesday. After a bit of hesitation below the previous swing high of 0.8580, a convincing bullish breakout indicates a strong enough pressure as the euro strives to cement its base above 0.8500 and to bottom out. The support-turned-resistance of 0.8600 is a key hurdle and its breach would help the bulls take over the short-term direction, exposing the recent top of 0.8655. 0.8570 at the start of the latest breakout is the first support in case of a retracement.

XAUUSD finds support

Gold consolidates gains as a lack of catalyst helps the post-CPI rally catch its breath. A bounce above the supply zone of 1937 and the 30-day SMA has prompted sellers to cover, easing the downward pressure. The direction is still skewed to the upside from the daily chart’s perspective and the current rebound could attract the bulls’ attention. 1966 is the next obstacle to clear, then June’s high of 1982 would be the bears’ last stronghold. On the downside, 1933 is a fresh support to maintain the current momentum.

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