Fundamental view:

The yellow metal bounced up and down against the greenback in this week. The unabated USD strength at the start of the week caused the pair to show a downtrend at the beginning of the week. Atlanta Federal Reserve Bank President Raphael Bostic said that the Fed could start to reduce asset purchases between October and December, and the Richmond Federal Reserve Bank President Thomas Barkin said that the Fed has made substantial further progress towards the taper benchmark.

But by Wednesday, greenback showed selling pressure after the inflation release. The US Department of Labor reported that Initial Jobless Claims declined by 12,000 to 375,000 in the week ending August 7 and the US Bureau of Labor Statistics announced that the annual Producer Price Index (PPI) for final demand jumped 7.8% from 7.3%.Amidst all the catalysts, the yellow metal formed a bull candle.              

The major economic events deciding the movement of the pair in the next week are NY Fed Empire State Manufacturing Index at Aug 16, Retail Sales monthly report, Fed Industrial Production monthly report at Aug 17, EIA Crude Oil Stocks Change, FOMC Minutes at Aug 18, Philadelphia Fed Manufacturing Index and Initial Jobless Claims at Aug 19 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 2.86% lower than the previous week. Maintaining high at 1779.2 and low at 1682.4 showed a movement of 968 pips.

In the upcoming week we expect XAU/USD to show a bullish trend.  The Instrument is trading above the 50 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1811.4 may open a clean path towards 1843.7 and may take a way up to 1908.2. Should 1714.6 prove to be unreliable support, the XAUUSD may sink downwards 1650.1 and 1617.8 respectively. In H4 chart rounding bottom pattern favors prospects of a bullish trend. Also to be noted Bullish harami formation exerts the expectation of uptrend for the pair.