Gold Price Analysis: Pressed to critical support, break or bounce? – Confluence Detector

Gold has been dropping from the highs amid an upbeat market mood that turned unfavorable for the precious metal. Can it recover? XAU/USD is sitting at critical support.    

The Technical Confluences Indicator is showing that gold is sitting just above a cluster of the line at $1,706, which includes the Simple Moving Average 5-15m, the previous 4h-low, and the all-important Fibonacci 23.6% one-month.

If it loses that level, the next cushion is only at $1,691, which is the meeting point of two pivot points – the one-day Support 2 and the one-week S2.

Noteworthy resistance awaits at $1,713, which is the convergence of the PP one-week S1 and the SMA 200-4h. 

The next cap is at $1,717, which is the confluence of the Bollinger Band 15min-Upper, the BB one-day Middle, and the previous week’s low. 

The upside target is $1,729, which is where the SMA 100-1h and the Fibonacci 23.6% one-week converge. 

Here is how it looks on the tool:

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.

This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.

Learn more about Technical Confluence