#XAUUSD @ 1650.83 Gold price fades the week-start recovery, eyes to retest three-week-old horizontal support., @nehcap view: Further weakness expected (Pivot Orderbook analysis)

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• Gold price fades the week-start recovery, eyes to retest three-week-old horizontal support.
• DXY licks its wounds after falling the most in a fortnight, yields retreat.
• Hawkish Fed bets, looming intervention from Japan test XAU/USD buyers.
• Light calendar could keep gold traders struggling inside bearish channel.

The pair currently trades last at 1650.83.

The previous day high was 1668.53 while the previous day low was 1643.84. The daily 38.2% Fib levels comes at 1659.1, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1653.27, expected to provide resistance.

Gold price (XAU/USD) struggles to extend the previous day’s recovery from a fortnight low, easing back to $1,650 during Tuesday’s Asian session, as the week-start optimism fades amid a lack of major positives. Also challenging the metal buyers could be the looming fears of market intervention by the Japanese and Chinese policymakers to defend their respective currencies, as well as hawkish Fed bets.

Japanese Finance Minister Shunichi Suzuki said that they are keeping a close eye on the fx market with a sense of urgency. The comments become important as the USD/JPY hits the highest levels since 1990. Elsewhere, Reuters quotes six anonymous sources to mention that China’s major state-owned banks were spotted swapping yuan for U.S. dollars in the forwards market and selling those dollars in the spot market on Monday morning.

It should be noted that the market’s bets, as per the CME’s FedWatch Tool, suggest a 75 bps Fed rate hike in November, which in turn probe the XAU/USD buyers. The hawkish Fed bets could have recently taken clues from upbeat comments from US Treasury Secretary Janet Yellen, suggesting a strong US jobs market, as well as upbeat US inflation expectations as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data.

On Monday, the British Finance Minister’s, also called Chancellor, reversal of earlier policy announcements boosted the market’s hope that London will overcome the impending market collapse, which in turn favored the XAU/USD buyers. “Under the new policy, most of Truss’s 45 billion pounds of unfunded tax cuts will go and the two-year energy subsidy scheme for households and businesses – expected to cost well over 100 billion pounds – will now be curtailed in April,” stated Reuters.

Also favoring the gold buyers was the downbeat US data. That said, NY Empire State Manufacturing Index for October dropped -9.5 versus -4.0 expected and -1.5 prior.

Alternatively, China’s zero covid policy and determination to keep the power in Hong Kong and Taiwan join the energy crisis in Eurozone to challenge the XAU/USD bulls.

Moving on, a light calendar may allow the metal sellers to go slowly but any positive surprises for the US dollar, in terms of market meddling by Japan and/or China won’t be ignored.

Gold price remains inside a five-week-old bearish channel amid sluggish MACD and RSI (14), which in turn suggests the metal to stay on the seller’s radar unless crossing the formation’s upper line, around $1,664 by the press time.

Even if the quote rises past $1,664, the 50-EMA hurdle surrounding $1,670 will be important for the XAU/USD bulls to watch before trying to retake control.

Following that, a one-week-old horizontal resistance area near $1,683 could act as the last defense of the gold bears.

Alternatively, multiple levels marked since September 27 restrict immediate gold price moves near $1,640 ahead of the stated channel’s support line, close to $1,631 at the latest.

Trend: Further weakness expected

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1651.38 at the time of writing. Pair opened at 1650.1 and is trading with a change of 0.08% % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1670.36, 50 SMA 1708.42, 100 SMA @ 1748.03 and 200 SMA @ 1817.76.

The previous day high was 1668.53 while the previous day low was 1643.84. The daily 38.2% Fib levels comes at 1659.1, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1653.27, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1639.78, 1629.47, 1615.09
• Pivot resistance is noted at 1664.47, 1678.85, 1689.16

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