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• The XAU/USD pair fell near the 100-day SMA at around $1,960, but the pair ultimately held onto weekly gains.
• The US dollar continued to gain ground on Friday following solid Jobless Claims data.
• All eyes are on the FOMC decision next week.

At the end of the week, the XAU/USD pair traded near the 100-day Simple Moving Average of $1,962, experiencing a 0.30% decline. However, the pair nonetheless recorded a weekly gain, its third in a row.

The prevailing strength of the US dollar continued to exert downward pressure on XAU/USD. Notably, the recent release of Initial Jobless Claims data by the US Department of Labor revealed a lower figure of 228,000 people filing for unemployment benefits in the second week of July, below the market expectation of 242,000.

These positive employment figures reflect a robust US economy, potentially prompting the Federal Reserve to maintain a more aggressive stance. In that sense, the US bond yield rose sharply on Thursday, boosting the US dollar and applying the non-yielding metal selling pressure.

 Ahead of next week’s Federal Open Market decision, markets have practically priced in a 25 basis point hike, and robust labor market data boosted the odds of an additional hike past July. However, those odds remain low, near 30%. In addition, Chair Powell’s words will be closely watched as investors look for clues regarding forwards guidance.

XAU/USD Levels to Watch

The daily chart of XAU/USD indicates a negative market sentiment that is dominated by bears. The Relative Strength Index (RSI) stands in positive territory above the midline but with a negative, while the Moving Average Convergence Divergence (MACD) displays fading green bars, signalling exhaustion for the bulls.

In the broader context, despite the bearish momentum, the price trading above the 20-, 100-, and 200-day Simple Moving Averages indicates that the overall trend continues to favor the bulls.

• Support levels: $1,960 (100-SMA), $1,950, $1,936 (20-day SMA).
• Resistance levels: $1,970, $1,987 (monthly high), $2,000.

XAU/USD Daily Chart

XAU/USD Technical Levels

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