Gold remains confined in daily range ahead of US data

The XAU/USD pair started the day under pressure as the markets cheered the fact that the congressional leaders were able to avert a government shutdown by reaching a deal to fund the government until October.

After dropping to a daily low at $1261.57, the pair went into a consolidation phase ahead of the important data from the U.S. and is now trading at $1263.40, still down 0.35% on the day. Also, with the exception of the U.S., most of the major markets are closed due to the Labor Day holiday and the volumes struggled to pick up so far in the day. After testing the 99 handle and failing for the third trading day in a row, the US Dollar Index has been moving sideways around 98.90, where it closed the previous week.

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Technical outlook

The pair could face the first resistance at $1271 ahead of $1288 (Apr. 21 high) and $1295 (Apr. 17 high). To the downside, supports could be found at $1260 (Apr. 26 low), $1249 (50-DMA) and $1239 (200-DMA).