XAUUSD Current price: $1,759.95
- A dismal market mood and higher US Treasury yields help the dollar to advance.
- Market players are concerned about global inflation and the following economic setback.
- XAUUSD could keep falling in the near term, Fibonacci support at $1,749.95.
Spot gold is down for a second consecutive day, nearing the weekly low posted on Monday at $1,753.19. The American Dollar has been rising since the day started, gathering additional momentum early in the US session as Treasury bond yields ticked north. The 10-year note currently yields 3.80%, while the 2-year note offers 4.45%, up roughly 10 bps in the day.
Market players move away from high-yielding assets, which supports the greenback, concerned about renewed geopolitical tensions between Russia and NATO, potential Chinese lockdowns affecting international commerce, and fears of a global recession. Meanwhile, despite inflation showing signs of easing in the United States, other major economies keep reporting record levels.
Stock markets stand in the red but off their early lows, limiting the US Dollar gains at the time being. The greenback will likely keep moving accordingly to sentiment as reflected by equities.
XAUUSD price short-term technical outlook
XAUUSD daily chart shows that the latest slide could be read as corrective. The pair is developing above the 23.6% retracement of its latest rally between $1,616.52 and $1,786.46 at $1,745.95, the immediate support level. Technical indicators hold near overbought readings, lacking clear directional strength. Finally, the 20 SMA maintains its bullish slope, advancing far below the current level, somehow maintaining the longer-term trend alive.
In the near term, and according to the 4-hour chart, there is room for a steeper bearish correction. Technical indicators have crossed their midlines into negative territory, with the Momentum heading firmly south and the RSI stabilizing around 49. Also, the 20 SMA turned flat and now provides dynamic resistance at around $1771.10. However, the longer moving averages maintain their firmly bullish slopes below the current level, suggesting there is still room for higher highs once the correction is complete.
Support levels 1,745.95 1,735.10 1,722.50
Resistance levels: 1.771.10 1,786.50 1,794.60
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