Baxia Markets
October 02, 2023

USD Strength Looms: XAUUSD Sees Further Bearish Pressure Ahead

market analysis header imageXAUUSD, the gold-to-US dollar trading pair, started the week with a gap down but managed to close that gap, albeit without garnering sufficient buyer interest to sustain the upward momentum. This price action has raised concerns about the bearish sentiment surrounding gold, potentially leading it to test the key level support zone around 1820-1825 shown in a green rectangle.


Looking ahead to Monday's New York trading session, all eyes will be on Fed Chair Powell's speech. However, before that event, the market will receive crucial data in the form of the ISM Manufacturing PMI and ISM Manufacturing Prices reports. These indicators will provide insights into the strength of the US dollar (USD). Economists are anticipating a slight improvement in the ISM Manufacturing PMI, projected at 47.7 versus the previous reading of 47.6, as well as an uptick in ISM Manufacturing Prices, forecasted at 48.6 compared to the previous 48.4.

 USD Strength Looms: XAUUSD Sees Further Bearish Pressure Ahead

A result surpassing expectations could strengthen the USD and further dampen gold's prospects. Conversely, a mixed or weaker-than-anticipated outcome may offer some reprieve to XAUUSD traders, potentially turning the tide in favor of the precious metal.


Technical Overview:


Analyzing the 1-hour timeframe chart for XAUUSD, several key technical indicators underscore the bearish sentiment:


  1. The MACD signal line and histogram are situated below the critical 0 level.
  2. The Exponential Moving Average (EMA) 50 remains below the EMA 200.
  3. The William Percent Range (period 200) indicates bearish conditions with a reading below -60.

In the event of a correction, the market is likely to encounter resistance in the 1853-1950 range, as highlighted within a pink rectangle. The next support zone for XAUUSD can be found at 1820-1825.

Economic calendar link 

Economic Releases to Watch Today!

Germany’s Manufacturing PMI for Sep 2023

Forecast 39.8, versus 39.8 previous.

Euro Zone Manufacturing PMI for Sep 2023

Forecast 43.4, versus 43.4 previous.

UK Manufacturing PMI for Sep 2023

Forecast 44.2, versus 44.2 previous.

US Manufacturing PMI for Sep 2023

Forecast 48.9, versus 48.9 previous.

US ISM Manufacturing Index for Sep 2023

Forecast 47.9, versus 47.6 previous.

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