Absolutely. Request Parsed Dynamic Values are working with JSON, XML and Form URL-Encoded bodies. Some docs is available here (though it's for JSON, and XML is not as well integrated in the UI): https://paw.cloud/docs/advanced/reuse-values-from-previous-responses
Here are some detailed steps for XML:
Right-click on a field, and pick: Response > Response Parsed Body

Enter the XML path to the object you want to access:

Unfortunately the XML path library we're currently using isn't always consistent, so to access text nodes, try .text or .text[0]…
In this example, I access the path slideshow.slide.title.text[0] this XML: https://httpbin.org/xml