Gold eases off highs, drops below $1350 on modest USD recovery

After refreshing its one year high at $1357, the XAU/USD pair reversed course and dropped into the negative territory in the early NA session. As of writing, the pair was trading at $1348, losing 0.08%, or $1, on the day.

On the last day of the week, the pair's price action seems to be dominated by the greenback movements. The US Dollar Index, which tested the 91 handle in the early European trading hours started to retrace its losses and is now at 91.20, down 0.33% on the day. However, this recovery move seems to be a merely technical correction as there were no fundamental releases from the U.S. that could boost the demand for the buck. Philly Fed President Harker recently delivered his speech but refrained from commenting on the monetary policy or the economic outlook.

In the meantime, major equity indexes in the U.S. are signaling towards a weak opening amid the broad-based selling pressure witnessed on the European stocks. As of writing, the UK FTSE 100 index was losing 0.4% while Euro Stoxx 600 and Germany's DAX indexes were little changed on the day as they were trying to take back their early losses.

Later in the session, the economic docket in the U.S. will feature wholesale inventories and consumer credit change data, which are unlikely to trigger any significant market reactions ahead of the weekend.

Technical outlook

Above $1357 (daily high), the pair could head towards $1365 (Aug. 4, 2016, high) and $1375 (Jul. 6 high). On the downside, supports could be seen at $1332 (Sep. 7/8 low), $1310 (20-DMA) and $1300 (psychological level). The CCI on the daily graph seems to have turned flat a little above the 100 mark, suggesting that the bullish momentum is losing strength.