Gold (XAU/USD) hovers in the upper band of the recent trading range, await a strong catalyst for the decisive break towards the $2000 mark. The spot booked the first monthly decline in five in August.
Resurgent broad US dollar supply amid Fed’s dovishness rescued the gold bulls. Although the bounce remained capped by the record-breaking Wall Street rally. Attention now turns towards the Fedspeak alongside the releases of the US Markit and ISM Manufacturing PMIs for fresh impetus.
How is gold positioned technically?
Gold: Key resistances and supports
The tool shows that gold has taken out the critical $1977 barrier, the intersection of the previous week high and previous day high.
Next on the buyers’ radar now remains the July high of $1985. Acceptance above the latter could see a test of $1988, the pivot point one-day R2.
The pivot point one-week R1 at $1992 is the next upside target, as $1995 resistance is likely to be a tough nut to crack for the XAU bulls on its way to the $2000 mark.
To the downside, the previous resistance at $1977 will act as the immediate cushion, below which the next relevant support is aligned at $1972, the Fibonacci 61.8% one-day.
Further south, a cluster of healthy support levels is stacked up around $1970, which the convergence of the previous low one-hour, Bollinger Band 15-minutes Middle and the previous high on four-hour.
Sellers will then aim for $1967 support, the SMA10 four-hour.
The path of least resistance appears to the upside amid fewer healthy resistance levels.
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.
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