VOT Research Desk
Market Analytics and Considerations
- A gloomy market environment and higher US Treasury yields support the dollar’s growth.
- Market participants worry about global inflation and the ensuing economic downturn.
- In the near term, XAUUSD may continue to decline as $1,749.95 serves as Fibonacci support.
The price of spot gold has fallen for two days in a row and is getting close to the weekly low of $1,753.19. The US dollar has been climbing all day, and it gained more traction in the early US trading session as Treasury bond yields moved upward. The yield on the 10-year note is currently 3.80%, while the yield on the 2-year note has increased by almost 10 basis points during the past day.
Worried about resurgent geopolitical tensions between Russia and NATO, prospective Chinese lockdowns impacting international commerce, and fears of a worldwide recession, market participants migrate away from high-yielding assets, which supports the dollar. While the United States’ inflation appears to be slowing down, other significant economies are still reporting record amounts.
Stock markets are currently down but off their initial low points, which is currently preventing the US Dollar from gaining value. The dollar will probably continue to fluctuate in line with stock market sentiment.
Short-term technical prognosis for the XAUUSD price
The most recent decline may be interpreted as corrective, according to the XAUUSD daily chart. The pair is rising over $1,745.95, the immediate support level, which is the 23.6% retracement of its most recent gain between $1,616.52 and $1,786.46. Trend lines lack obvious directional strength and continue to hover towards overbought estimates. The longer-term tendency is strangely kept alive by the 20 SMA, which continues to advance considerably below the present level while retaining a bullish slope.
The 4-hour graph demonstrates that a sharper negative correction is possible in the short term. The Momentum is steadily moving south, while the RSI has stabilized at roughly 49. Technical indicators have crossed their midlines into negative territory. Additionally, the 20 SMA became flat and is currently offering dynamic resistance around about $1771.10. Nonetheless, the lengthier moving averages retain their strongly bullish slopes below the present rate, indicating that once the correction is finished, there may still be potential for higher highs.
Support levels 1,745.95 1,735.10 1,722.50
Resistance levels: 1.771.10 1,786.50 1,794.60
