Gold prices continue to withhold $1568 support level. On Thursday, the European Central Bank (ECB) had decided to keep its interest rates unchanged. Following this announcement, there was a tremendous jump in the dollar.
Needless to say, at that point, the yellow metal showed reluctance to nosedive from its current comfort zone. Instead, last day, there was a slight upside in the gold prices.
Meanwhile, US-Iran tensions continue to stay in action. As per the latest news, thousands of Iraqis rallied at two central Baghdad intersections today. The Iraqi protesters want the American military to move outside their region, following the recent killing of the Iranian general and an Iraqi military chief.
Gold seems quite silent as the Greenback steps up towards 98 levels. The US Dollar Index is about to display a Kumo breakout in its daily chart. Even the lagging span was positioned above the USD Index, suggesting future uptrend price actions.
Last day, the USD Index had remarkably broken above a robust resistance handle stalled near 97.68 levels. This abrupt price growth shows the resilient nature of the Greenback bulls.
Meantime, the Parabolic SAR remains in place well below the Index, cheering the bulls for a Kumo breakout. Also, the Stochastic Oscillator was indicating 97.52 levels, taking the ball inside the overbought territory.
The technicals remain in favor of the gold bulls. Notably, the XAU/USD pair was trading well above the base line, conversion line, and the red Kumo clouds. I can see the bull flag taking shape, getting ready for a near term breakout.
Also, the lagging span of the Ichimoku Clouds indicator was suggesting uptrend as the primary trend in the yellow metal price chart.
Nevertheless, I notice a slight drop in the overall momentum, as shown by the Stochastic Oscillator. The Parabolic SAR continues to take declines, approaching the pair from the top.
However, any immediate downward price action might take the XAU/USD pair below the conversion line, disturbing the whole setup.
On the smaller time frame, the XAU/USD pair continues to remain stuck inside the red Ichimoku Clouds. Therefore, consolidation or range-bound movement might continue for the upcoming few more sessions until a near term Kumo breakout.
Noticeably, on the 4H chart, there appears a Bear Flag break that must be noted.
Additionally, the current red Kumo Cloud in which the pair is stuck has a flat top. So, any near term Kumo breakout from this Kumo Cloud might come out as less significant.