The fate of gold (XAU/USD) hinges on the much-awaited outcome of the US Presidential election, which will determine the extent of the fiscal stimulus aid, as the country battles intensifying second wave of the coronavirus.
A sweeping Blue-wave victory could likely be the best bet for the gold buyers. However. a contested outcome would reinforce the bearish momentum in the yellow metal. Therefore, a sense of caution will likely prevail in the markets in the lead up to the US election, underpinning the safe-haven dollar while keeping the upside attempts limited in gold. How is gold positioned technically?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the yellow metal could face an immediate hurdle at $1888 on its road to recovery, which is the confluence of the SMA100 one-hour and Fibonacci 38.2% one-month.
Subsequently, recapturing the powerful barrier at $ 1891 is critical for the recovery to gain traction. At the level, the SMA100 one-day, previous day high and pivot point one-day R1 intersect.
The next upside target awaits at $1900, the convergence of SMA200 four-hour and Bollinger Band one-day Middle. Meanwhile, the Fibonacci 61.8% one-month at $1906 is the level to beat for the XAU bulls.
Alternatively, acceptance below the confluence of the Fibonacci 38.2% one-week and one-day at $1880 is needed to unleashing additional downside in the spot.
Sellers will then target $1877 support, where the Fibonacci 23.6% one-month lies. A failure to resist above the last could trigger a fresh drop towards the strong cushion at $1861, the previous week and 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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