#XAUUSD @ 1706.79 Gold gains strong follow-through traction and rallies to a three-week high on Tuesday. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• Gold gains strong follow-through traction and rallies to a three-week high on Tuesday.
• Retreating US bond yields weighs heavily on the USD and offers support to the metal.
• Bulls shrug off the risk-on impulse, though hawkish Fed expectations could cap gains.

The pair currently trades last at 1706.79.

The previous day high was 1701.6 while the previous day low was 1659.71. The daily 38.2% Fib levels comes at 1685.6, expected to provide support. Similarly, the daily 61.8% fib level is at 1675.71, expected to provide support.

Gold is extending the overnight breakout momentum through the $1,680-$1,685 supply zone and building on its recovery from the lowest level since April 2020. The strong follow-through positive move lifts the XAU/USD to a three-week high, around the $1,710 region during the first half of the European session on Tuesday.

The US dollar retreats further from a two-decade top touched last week and turns out to be a key factor driving flows towards the dollar-denominated commodity. The Bank of England’s willingness to buy up to £5 billion of long-dated gilts drags the US bond yields away from a multi-year top and continues to weigh on the greenback.

Apart from this, growing worries about a deeper economic downturn in the US and Europe offer additional support to the safe-haven gold. The fears were further fueled by Monday’s disappointing US data, which showed that manufacturing activity grew marginally in September, at its slowest pace in nearly 2-1/2 years.

This, to a larger extent, helps offset the risk-on mood and does little to dent the prevalent bullish sentiment surrounding gold. That said, the prospects for a more aggressive policy tightening by major central banks could act as a headwind for the non-yielding yellow metal and keep a lid on any further gain, at least for now.

Market participants now look forward to the US monthly employment details, scheduled for release on Friday. The popularly known NFP report will play a key role in influencing the Fed’s future rate hike path. This, in turn, should help investors to determine the next leg of a directional move for the greenback and gold.

In the meantime, Tuesday’s US economic docket features JOLTS Job Openings and Factory Orders data. This, along with speeches by FOMC members and the US bond yields, will drive the USD demand and provide impetus to the XAU/USD. Traders will also take cues from the broader risk sentiment for short-term opportunities around gold.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1708.91 at the time of writing. Pair opened at 1699.84 and is trading with a change of 0.53 % .

The pair is trading above its 20 Daily moving average @ 1678.63, below its 50 Daily moving average @ 1724.57 , below its 100 Daily moving average @ 1764.37 and below its 200 Daily moving average @ 1824.06

The previous day high was 1701.6 while the previous day low was 1659.71. The daily 38.2% Fib levels comes at 1685.6, expected to provide support. Similarly, the daily 61.8% fib level is at 1675.71, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1672.5, 1645.16, 1630.61
• Pivot resistance is noted at 1714.39, 1728.94, 1756.28

[/s2If]
Join Our Telegram Group