Oct 24, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
XAUUSD Price: $1,650.92 at this time
This week’s financial markets will be shaken by central banks’ monetary policy choices and growth statistics.
Players in the market wrangle sluggish macroeconomics factors and upbeat earnings announcements.
A sharp early rise beyond a crucial Fibonacci line at $1,658.50 was immediately corrected by XAUUSD.
At the weekly start, the American Dollar was still under price pressure, continuing its Friday fall. Before the market switched back to the USD and sent the shining metal into the red, XAUUSD achieved an intraday high of $1,670.84 per troy ounce.
As investors struggle to decide what to do next, gold is now trading at about $1,650. On the one hand, lukewarm figures on growth have sparked worries among market players, bolstering the USD. On the other hand, despite weaker-than-expected US data, global markets are steadily rising as earnings reports point to positive economic developments. The U.S economy “saw a further fall in output at the start of the fourth quarter,” according to the flash S&P Global Purchases Manager Indexes. The industrial output dipped into contraction zone in October, printing at 49.9, a 28-month low, while the services PMI declined sharply to 46.6, below the anticipated 49.2 reading.
Several central banks will make their financial policy announcements in the coming days. The Reserve Bank of Australia and the US Federal Reserve will publish their decisions next week, while the Bank of Canada, the Bank of England, and the European Central Bank will do so this week. The US will release the preliminary design of its Quarter 3 Gross Domestic Product in the middle of the period, which is expected to reverse the downward trend of the year’s first two quarters.
It appears improbable at this time that criteria will be released before the aforesaid occurrences on the financial markets.
Relatively brief technical prognosis for the XAUUSD price
The 50% iteration of the XAUUSD pair’s $1,614.81/$1,729.54 rally at $1,671.90 served as a Fibonacci resistance level for sellers, and the pair now trades just below 61.8% retracement of the same rally at about $1,658.50. The pair is developing below a flat 20 SMA, while the longer moving averages retain their negative slopes above it, according to the daily chart. While this is happening, technical indicators continue to move lower inside negative levels, in line with a bearish continuation.
The 4-hour chart presents an impartial viewpoint. In between a directionless 20 SMA below the existing level and an equally rudderless 100 SMA, which conforms with the intraday top, XAUUSD is developing in the middle. Technical indicators are simultaneously digging lower while still being over their midlines, indicating declining purchasing enthusiasm. At $1,643.40, the daily bottom offers right away static support.
Levels of support: 1,643.40 1,635.95 1,621.00
Levels of resistance: 1,658.50 1,671.00 1,688.00
