#XAUUSD @ 1660.36 Gold price holds lower ground after 100-EMA rejected recovery moves., @nehcap view: Further weakness 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 holds lower ground after 100-EMA rejected recovery moves.
• Firmer yields, rebound in DXY keeps buyers hopeful ahead of the key US consumer-centric data.
• Risk catalysts may exert downside pressure on the XAU/USD prices.
• Softer US data may recall gold buyers amid jittery markets.

The pair currently trades last at 1660.36.

The previous day high was 1682.53 while the previous day low was 1642.45. The daily 38.2% Fib levels comes at 1657.76, expected to provide support. Similarly, the daily 61.8% fib level is at 1667.22, expected to provide resistance.

Gold price (XAU/USD) remains pressured around $1,662 during Friday’s Asian session, reversing the previous day’s bounce off a fortnight low, as the US dollar traces firmer Treasury yields to rebound ahead of the key consumer-centric data from the US.

US 10-year Treasury yields remain firmer around 3.96% after snapping a two-day downtrend to poke the October 2008 levels. The firmer bond coupons portray the market’s recession fears and rush towards the risk-safety but failed to propel the US dollar the previous day.

It should be noted that the Japanese and Chinese policymakers’ ignorance of the International Monetary Fund’s (IMF) push for higher rates also should have weighed on the XAU/USD prices. In doing so, the yellow metal ignores the People’s Bank of China (PBOC) Governor Yi Gang’s readiness for strong stimulus.

The bullion prices marked a notable recovery from the lowest levels in a fortnight the previous day after a third consecutively softer US Consumer Price Index (CPI) jostled with the 40-year high Core CPI and drowned the US Dollar Index (DXY) despite hawkish Fed bets. Talking about the data, the DXY dropped 0.70% to 112.45 by the end of Thursday’s North American session. It’s worth noting that the US CPI rose to 8.2% versus 8.1% market forecasts but eased as compared to the 8.3% prior. The CPI ex Food & Energy, mostly known as the Core CPI, jumped to 6.6% while crossing the 6.5% expectations and 6.3% previous readings.

Amid these plays, Wall Street closed firmer but the S&P 500 Futures print mild losses by the press time.

Moving on, the US Retail Sales for September, the preliminary readings of the Michigan Consumer Sentiment Index (CSI) and the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations for October will be crucial for clear directions. Also important will be the covid updates from China and chatters of market intervention by the Chinese and Japanese policymakers, not to forget political pessimism in the UK.

To sum up, XAU/USD has more reasons to ward off the previous day’s bounce than the stimulus news from China that challenge the bears.

Gold prices are likely to remain downbeat while considering the multiple failures to cross the 100-EMA, as well as the sluggish and RSI retreat.

That said, the 23.6% Fibonacci retracement level of the August-September downside, near $1,651, offers immediate support to the bright metal. However, a three-week-old horizontal support area surrounding $1,640-42, could stop the XAU/USD bears before directing them to the yearly low of $1,614.

Meanwhile, recovery moves need not only to cross the 100-EMA hurdle of $1,680 but the 200-EMA resistance of $1,692 to convince the buyers. Following that, the $1,700 and the monthly high near $1,730 will be in focus.

Trend: Further weakness expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1662.06 at the time of writing. Pair opened at 1666.38 and is trading with a change of -0.26% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1673.13, 50 SMA 1713.81, 100 SMA @ 1752.17 and 200 SMA @ 1819.21.

The previous day high was 1682.53 while the previous day low was 1642.45. The daily 38.2% Fib levels comes at 1657.76, expected to provide support. Similarly, the daily 61.8% fib level is at 1667.22, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1645.04, 1623.71, 1604.96
• Pivot resistance is noted at 1685.12, 1703.87, 1725.2

[/s2If]
Join Our Telegram Group