Gold below $1300 with bearish bias

The perceived safe haven precious metal broke the critical $1300 barrier today and marked a fresh 4-month low at $1288. US bulls and some technical factors pushed the price to the downside. DXY jumped to 93.28 after the release of US retail sales data, but the main driver of grenback’s strength are the rising US yields, which pinned today the highest level since 2011.

Technically speaking the bias is clearly bearish. XAU/USD broke the key support provided by 50% Fibonacci retracement of latest December to January bullish run at $1300. The slide continued and tested the 61.8% of same Fibo and finally the price bounced slightly to currently trade at $1292.

Ont he daily chart stochastic and RSI are showing strong bearish momentum and both are located below their mid-lines.

If the current breakdown is sustained, gold might meet again the 61.8% Fibo at $1286 before it has any chance to rebuild. However, the $1300 level remains reclaimed decisively so the bullish stance is rejected. Furthermore if the price goes back above the resistance provided by 50% FIbo at $1302 then we might conclude that today’s sell-off could be a false breaks. Golden bulls could return only if  breaking the recent swing high at $1325. But for now the path is paved towards the downside. 

Gold At Three Month High

As both Europe and USA are overtaken by political woes and uncertainty is rising, investors are eyeing precious metals. Gold prices resumed the upward movement and yesterday marked the highest level since November at $1244. 

Technical indicators have modestly retreated from the overbought region. As seen on the four hour frame RSI is located slightly below 70 and is showing lack of momentum. Stochastic is displaying modest bearish direction, but yet is within extreme overbought area.

Short-term support is found at $1230 (50% Fibonacci rertracement of latest $1137 to $1122 decline). Next support is seen at $1204 (38.2% of same retracement).

To the upside bulls are thrilled by $1245 (a multi month high) and if conquering this level, next target is the resistance at $1255 (61.8% Fibo). 

Among this political uncertainty, a march towards the $1300 handle seems to be quite possible, due to the increased demand for safe-heaven assets.   

USD/JPY in consolidation

USD/JPY pair was trading elevated today with moving higher above 50-day, 100-day and  200-day moving averages. The pair has not been so much uplifted for months and probably the rising expectations for Fed’s rate hike are provoking for US dollar’s strength and at the same time pressuring for the safe haven yen. 

Anyway the USD/JPY pair marked today an intraday high at 104.14, but couldn’t hold it for long time and slight downward movement followed. Currently the pair is consolidating around 104 handle. It is very hard to predict the further behaviour of the pair, especially tomorrow, as the NFP release is going to be the main engine that will stir the markets.RSI is showing overbought market and stochastic is showing strong strong momentum is above the 80 line. Resistance is now located at 104.30 and further on at 105.00, which is key pattern. Looking downwards support is seen at 103.69  and 102.64.