(Slobodan Drvenica – Windsor Brokers)
Spot gold hits one-week low in European trading on Tuesday, in extension of Monday’s 1.6% fall, holding in a steep downtrend for the fifth straight day.
Near-term action remains pressured by risk aversion that continues to lift dollar, in addition to expectations that Fed will remain in aggressive mode and deliver another big rate hike in Nov 2 policy meeting.
Pullback from $1729 (Oct 4 lower top) has so far retraced over 50% of $1614/$1729 recovery leg), with today’s close below 50% level, reinforced by falling 20DMA ($1672) to boost bearish signals for extension towards targets at $1658 / $1641 (Fibo 61.8% and 76.4% respectively), which guards key support at $1614 (2022 low).
Daily moving averages turned to full bearish setup and south-heading 14-d momentum moved into negative territory, adding to negative near-term structure.
Limited corrective upticks on oversold conditions and partial profit-taking, to provide better selling levels, while the action stays below broken 10DMA ($1686).
Res: 1672; 1685; 1690; 1700.
Sup: 1658; 1641; 1620; 1614.
Murrey math lines: AUD/USD, NZD/USD
AUD/USD, “Australian Dollar vs US Dollar”
As we can see in the H4 chart, AUDUSD is trading below the 200-day Moving Average to indicate a possible descending tendency. The Relative Strength Index is moving within the ”oversold area”. In this case, the pair is expected to test 4/8 (0.6347), break it, and then continue growing towards the resistance at 5/8 (0.6469). However, this scenario may be cancelled if the price breaks the support at 3/8 (0.6225) to the downside. After that, the instrument may move downwards to reach 2/8 (0.6103).
In the M15 chart, the pair may break the upside line of the VoltyChannel indicator and, as a result, continue its growth.
NZD/USD, “New Zealand Dollar vs US Dollar”
As we can see in the H4 chart, NZDUSD is also trading below the 200-day Moving Average, thus indicating a descending tendency. The Relative Strength Index is approaching the “oversold area”. In this case, the price is expected to test 1/8 (0.5493), rebound from it, and then resume moving upwards to reach the resistance at 3/8 (0.5737). However, this scenario may no longer be valid if the price breaks the support at 1/8 (0.5493) to the downside. After that, the instrument may continue falling towards 0/8 (0.5371).
In the M15 chart, the pair may break the upside line of the VoltyChannel indicator and, as a result, continue moving upwards to reach 3/8 (0.5737).