Fundamental view:

After gaining more than 1% in the previous week, the XAU/USD pair struggled to preserve its bullish momentum and edged lower during the first half of the week and showed upward movement in the end day of the week. U.S. Dollar held steady, taking some of bullion’s allure kept it on track for its worst January in a decade.

The first half of the week was fueled by weakness in the equity markets as an ongoing retail versus hedge fund battle and doubts over European vaccine supply hurt global stocks. Meanwhile, new trial results from Johnson & Johnson’s coronavirus vaccine disappointed some investors, weighing on the broader market.              

The major economic events deciding the movement of the pair in the next week are ISM Manufacturing PMI at Feb 01, ADP Nonfarm Employment Change, ISM Non-Manufacturing PMI at Feb 03, Initial Jobless Claims at Feb 04, and Nonfarm Payrolls at Feb 05 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.03% higher than the previous week. Maintaining high at 1875.6 and low at 1831.4 showed a movement of 442 pips.

In the upcoming week we expect XAU/USD to show a bullish trend.  The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1871.6 may open a clean path towards 1895.8 and may take a way up to 1915.9. Should 1827.4 prove to be unreliable support, the XAUUSD may sink downwards 1807.2 and 1783.1 respectively. In H4 chart bullish crab pattern favors prospects of a bullish trend. Also to be noted three white soldiers formation exerts the expectation of uptrend for the pair.