#XAUUSD @ 1662.06 Gold price fades upside momentum during the first positive week in three, grinds higher of late., @nehcap view: Limited upside expected (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 price fades upside momentum during the first positive week in three, grinds higher of late.
• Pre-data anxiety, mixed sentiment test XAU/USD buyers, firmer yields also restricts upside momentum.
• Strong inflation numbers could pare gold’s weekly gains amid hawkish central banks, recession woes.

The pair currently trades last at 1662.06.

The previous day high was 1664.93 while the previous day low was 1641.59. The daily 38.2% Fib levels comes at 1656.01, expected to provide support. Similarly, the daily 61.8% fib level is at 1650.51, expected to provide support.

Gold price (XAU/USD) remains sidelined around the weekly tops, taking rounds to $1,660 during early Friday morning in Europe, as traders await the key data from the Fed’s preferred inflation gauge. Also challenging the metal prices could be the mixed sentiment and risk catalysts, as well as the quarter-end positioning.

That said, the recently printed mixed activity data from China, one of the major gold consumers, act as the immediate catalyst to limit the XAU/USD moves. That said, China’s official NBS Manufacturing PMI rose to 50.1 versus 49.6 expected and 49.4 prior while the Non-Manufacturing PMI declined to 50.6 compared to 52.0 market forecasts and 52.6 prior readings. Further, China’s Caixin Manufacturing PMI dropped to 48.1 during the stated month versus 49.5 expected and prior.

On the other hand, news that the dragon nation eased FX restrictions in response to the Fed rate rise, shared by the Financial Times (FT), contrasts the fears of a recession in Beijing to challenge momentum traders.

Elsewhere, hawkish central bankers and fears of recession underpin the Treasury yields but the US dollar struggles to regain upside momentum amid the quarter-end positioning. That said, the US Dollar Index (DXY) remains mildly bid around 112.10 while bracing for the first weekly loss in three. It should be noted that the stock futures and the Asia-Pacific equities also trade mixed as markets await the key US and European inflation numbers.

Additionally, the geopolitical tension between Russia and Ukraine joins the Sino-American tussles and the West versus Moscow problems to challenge the XAU/USD upside. On the contrary, the recent stimulus from the UK and Japan seems to help the risk-takers.

To sum up, the gold price anxiously awaits the US and Eurozone inflation data for clear directions.

Also read: US August PCE Inflation Preview: Will it trigger a dollar correction?

Gold price retreats from a 12-day-old descending resistance line, attacking the weekly triangle’s bottom near $1,660 by the press time. While the steady RSI and recently sluggish MACD hint at further grinding of the XAU/USD, the 50-SMA level around $1,652 act as an extra filter for the bear’s entry.

Following that, $1,642 and the latest swing low, also the yearly low of $1,614, could challenge the metal sellers.

It should be noted, that the commodity’s weakness past $1,614 will be challenged by the $1,600 threshold and a downward sloping support line from September 16, close to $1,605 at the latest.

Alternatively, an upside clearance of the immediate resistance line near $1,663 must cross the triangle’s upper line, at $1,671 as we write, to convince gold buyers. In that case, a run-up towards $1,688 and the $1,700 becomes imminent.

Trend: Limited upside expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1662.38 at the time of writing. Pair opened at 1660.59 and is trading with a change of 0.11% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1681.83, 50 SMA 1726.31, 100 SMA @ 1767.12 and 200 SMA @ 1825.35.

The previous day high was 1664.93 while the previous day low was 1641.59. The daily 38.2% Fib levels comes at 1656.01, expected to provide support. Similarly, the daily 61.8% fib level is at 1650.51, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1646.48, 1632.36, 1623.14
• Pivot resistance is noted at 1669.82, 1679.04, 1693.16

[/s2If]
Join Our Telegram Group