Investors remain on the edge amid rising coronavirus infections globally, with stricter restrictions likely to be imposed across the US. Therefore, the sentiment around Gold (XAU/USD) remains buoyed amid global economic growth concerns.
However, a broadly firmer US dollar combined with the US fiscal imprudence is likely to limit the upside in gold. The US coronavirus update and consumer sentiment data could offer fresh cues while the charts depict a continuation of the recent range play going forward.
Gold: Key resistances and supports
The Technical Confluences Indicator shows that it’s an uphill task for the XAU/USD bulls, as they battle $1880 resistance, which is the convergence of the Fibonacci 23.6% one-week and one-month.
A break above the latter will bring a minor cap at $1884 back in play. That level is the previous day high.
Further north, powerful resistance at $1891 (Tuesday’s high) will challenge the bulls commitment.
Only a successful break above the critical $1900 barrier could likely negate the near-term bearish bias. The level is the meeting point of the pivot point one-week S1, Bollinger Band one-day Middle and SMA100 four-hour.
On the flip side, $1874/73 is strong support, which is the confluence of the previous week low and previous low on four-hour.
The next downside cushion is seen at the intersection of the Fibonacci 61.8% one-day and SMA10 four-hour, which is the $1870 level.
Acceptance below the last could expose the critical $1860 support, the previous month low.
Here is how it looks on the tool
About Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.
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