FX Play of the Day: Spot Gold's (XAU/USD) Pullback From a Downtrend

<p>&nbsp;Spot gold just bounced from its new intraweek lows!</p><p><br /></p><p>In case you missed it, the Fed’s recent meeting minutes showed that members are still largely concerned about Uncle Sam’s inflation trends. In fact, many expect that they’ll keep their interest rates higher for longer, if not even higher in the foreseeable future.</p><p><br /></p><p>The idea of higher interest rates for a safe haven like the USD pushed the Greenback and Treasury yields higher. Gold, which is a non-yielding safe haven, lost its shine against the dollar.</p><p><br /></p><p>XAU/USD: 15-minute</p><p>This is probably one of the reasons why spot gold (XAU/USD) dropped below $1,890 earlier today and marked its lowest levels this week.</p><p><br /></p><p>But XAU/USD is trading higher now, especially as it looks ready to break a Reverse Head and Shoulders pattern in the 15-minute time frame.</p><p><br /></p><p><br /></p><p>Are we looking at an opportunity to enter XAU/USD’s weeks-long downtrend at a slightly better price?</p><p>Unless we see fresh market catalysts, then traders could continue to price in their worries over China’s growth. And, unless we see new anti-dollar headlines, then USD may continue to outpace gold as a safe haven preference.</p><p><br /></p><p>Watch out for the $1,897 Pivot Point line for some selling pressure. And if today’s XAU buying and USD selling extends to the next trading sessions, then we may see a retest of the $1,900 psychological level closer to the R1 Pivot Point line, 100 and 200 SMAs, and a 61.8% Fibonacci retracement level in the 15-minute time frame.</p><p><br /></p><p>A bearish reversal from the R1 area could lead to XAU/USD retesting its previous lows below $1,890. We could even see fresh intraweek lows before the week ends!</p><p><br /></p><p>It’s a less likely scenario, but if traders focus on second-guessing the hawkish FOMC meeting minutes, or if we see profit-taking from the long USD positions ahead of the weekend, then XAU/USD may break above the 100 and 200 SMAs for the first time in more than a week.</p><p><br /></p><p>Look out for sustained trading above $1,900 for a potential move towards previous areas of interest like $1,911 or $1,920.</p>