#XAUUSD @ 3.9588 Gold climbs to a nearly two-week high on Wednesday amid the prevalent USD selling bias. (Pivot Orderbook analysis)

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• Gold climbs to a nearly two-week high on Wednesday amid the prevalent USD selling bias.
• Diminishing odds for more aggressive Fed rate hikes continue to weigh on the greenback.
• The prospects for further tightening by major central banks could cap any further upside.

The pair currently trades last at 3.9588.

The previous day high was 1662.42 while the previous day low was 1638.35. The daily 38.2% Fib levels comes at 1653.23, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1647.54, expected to provide resistance.

Gold gains strong positive traction on Wednesday and rallied to a nearly two-week high, around the $1,675 region during the first half of the European session. The intraday move-up is exclusively sponsored by the heavily offered tone surrounding the US dollar, which tends to benefit the dollar-denominated commodity.

In fact, the USD Index, which measures the greenback’s performance against a basket of currencies, hits a one-month low amid diminishing odds for a more aggressive policy tightening by the Fed. The dismal US macro data released on Tuesday pointed to deteriorating growth in the world’s largest economy and might force the US central bank to soften its hawkish stance. Investors now anticipate a potential slowdown in the pace of the Fed’s rate-hiking cycle. This is evident from a further decline in the US Treasury bond yields, which continues to weigh heavily on the buck and provides an additional lift to the non-yielding gold.

The Fed, however, is still expected to continue to raise interest rates in the near future to combat stubbornly high inflation. Furthermore, other major central banks – the European Central Bank and the Bank of England- are also expected to deliver a jumbo rate hike at the upcoming policy meetings. This, in turn, might hold back traders from placing aggressive bullish bets around gold. Apart from this, signs of stability in the financial markets might further contribute to capping the safe-haven XAU/USD, at least for the time being. Hence, any subsequent move up is more likely to confront resistance near the $1,780-$1,782 supply zone.

Market participants now look forward to the release of the New Home Sales data from the US for some impetus later during the early North American session. This, along with the US bond yields, will drive the USD demand and produce short-term opportunities around gold. Traders will further take cues from the broader market risk sentiment. The focus, however, will remain on important US macro data due on Thursday, which will influence the near-term trajectory ahead of the FOMC meeting and the US NFP report next week.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1670.54 at the time of writing. Pair opened at 1653.2 and is trading with a change of 1.05 % .

The pair is trading above its 20 Daily moving average @ 1668.54, below its 50 Daily moving average @ 1691.14 , below its 100 Daily moving average @ 1735.76 and below its 200 Daily moving average @ 1812.57

The previous day high was 1662.42 while the previous day low was 1638.35. The daily 38.2% Fib levels comes at 1653.23, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1647.54, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1640.23, 1627.25, 1616.16
• Pivot resistance is noted at 1664.3, 1675.39, 1688.37

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