Fundamental view:

As the corona virus crisis became the primary driver of financial markets last March, the greenback adopted the role of a safe-haven and formed a strong inverse correlation with major equity indexes in the US.

Amid strong upbeat macroeconomic data releases and the coronavirus vaccine rollout, the above-mentioned correlation seems to have started to weaken lately. For the first time in nearly a year, better-than-expected data releases from the US provided a boost to the USD and weighed on XAU/USD.              

The major economic events deciding the movement of the pair in the next week are JOLTS Job Openings at Feb 09, CPI monthly report, EIA Crude Oil Stocks Change, Federal Budget Balance at Feb 10 and Initial Jobless Claims at Feb 11 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.21% lower than the previous week. Maintaining high at 1871.7 and low at 1784.9 showed a movement of 868 pips

In the upcoming week we expect XAU/USD to show a bearish trend.  The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 1775.4 may open a clean path towards 1736.7 and may take a way down to 1688.6. Should 1862.2 prove to be unreliable resistance, the XAUUSD may raise upwards 1910.4 and 1949.1 respectively. In H4 chart, descending scallop pattern formation favors prospects of a bearish trend. Also to be noted bearish harami formation exerts the expectation of downtrend for the pair.