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Gold (XAU/USD) is licking its wound after Tuesday’s 2% drop, fuelled by the resurgent haven demand for the US dollar after US President Donald Trump abandoned $2.4 trillion fiscal stimulus negotiations. On prospects of no stimulus deal ahead of the US elections, the risk sentiment took a huge hit, as gold tumbled alongside stocks.   

Somewhat hawkish comments from the Federal Reserve (Fed) policymakers further exacerbated the pain in the metal. Looking ahead, gold traders await fresh stimulus news and FOMC minutes for fresh impetus. Meanwhile, let’s take a look at how gold is positioned on the charts.

Gold: Key resistances and supports

The Technical Confluences Indicator shows that Gold is battling significant resistance at $1883, which is the convergence of the Fibonacci 23.6% one-month and Bollinger Band 15-minutes Upper.

The next cap for the buyers is aligned at $1886, the intersection of the Fibonacci 23.6% one-day and SMA10 one-day.   

A break above which, the metal will confront a dense cluster of resistance levels between $1890-93 before it reaches the $1897 level, which is the SMA5 one-day.

Further north, the confluence of the Fibonacci 23.6% one-week and SMA100 on 15-minutes at $1901 will be tested en route robust resistance at $1904.

That level is the convergence of the SMA50 one-hour, Fibonacci 61.8% one-day and 38.2% one-month

On the flip side, a failure to hold onto the critical support at $1875, the meeting point of the previous day low, Fibonacci 61.8% one-week and Bollinger Band 15-minutes Lower, could trigger a sharp drop towards the next relevant downside target of $1860 – where the pivot point one-week S1 and SMA100 one-day coincide.

Here is how it looks on the tool

 

About Confluence Detector

The TCI (Technical Confluences Indicator) 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.

Learn more about Technical Confluence