Gold Price Analysis: XAU/USD lacks a clear directional bias, key levels to watch – Confluence Detector

Despite an eventful week so far this Friday, Gold (XAU/USD) has continued to hold its recent $40 trading range. The yellow metal remains at the mercy of the dollar dynamics while markets reassess the Fed’s outlook on the US economic recovery, in light of the dismal jobless claims and housing data.

The Fed’s reluctance on additional stimulus likely caps the upside attempts in gold. Technically, the metal clings onto the robust 50-day Simple Moving Average (SMA). Let’s take a look at the key technical levels for trading gold in the day ahead.  

Gold: Key resistances and supports

The Technical Confluence tool shows that gold has held onto the critical $1945/43 support zone, which is the confluence of Fibonacci 38.2% one-month, Bollinger Band one-day Middle and SMA10 one-day.

A breach of the last, could lead to a probe of the minor support levels around $1940, the convergence of Fibonacci 23.6% one-day and Bollinger Band four-hour Lower.

Further south, the intersection of the previous day low and SMA50 one-day at $1932 will be challenged. The next downside target is aligned at $1929, the Fibonacci 61.8% one-week.

On the flip side, the metal battles the $1951/52 barrier, as we write. That is the confluence of the Fibonacci 61.8% one-day, SMA5 one-day and SMA10 four-hour.

The next soft cap is seen at $1955, the previous high on four-hour, above which the previous week high of $1966 will get exposed.

However, the bulls need a sustained break above the fierce $1969 barrier to validate a bullish breakout from the recent range trade. That hurdle is the pivot point one-week R1.

Here is how it looks on the tool

About the 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