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Gold (XAU/USD) is reversing Wednesday’s 1.5% slump, triggered by a broad-based US dollar comeback. The correction in the greenback from two-year lows came in on the back of stronger US ISM Manufacturing PMI and Factory Orders data while markets ignored the downbeat ADP jobs report.   

Attention now turns towards Thursday’s US Jobless Claims and Friday’s critical US Non-Farm Payrolls data for a clear direction in the prices. In the meantime, ‘buy the dips’ trading will remain in play, as the dovish Fed narrative will continue to remain supportive of the yieldless gold. Let’s look at the key technical levels for trading the yellow metal in the day ahead.

Gold: Key resistances and supports

The tool shows that gold is battling the previous support now critical resistance at $1950, the confluence of the SMA200 one-hour, Fibonacci 38.2% one-day and one-week.

A cluster of minor resistances is aligned around $1953, where the SMA100 and SMA5 on four-hour coincide.

It will be a tough ride for the XAU bulls northwards until the next significant barrier at $1960 is reclaimed, which is the convergence of the Fibonacci 23.6% one-week and SMA21 one-day.

The next major cap awaits at $1970 should gold find acceptance above the latter.

On the flip side, $1945 is the immediate cushion, which could offer temporary respite to the bulls. At that level, the Fibonacci 32.8% one-month and SMA5 one-hour meet.

Further down, the Fibonacci 61.8% one-week at $1932 will be a tough nut to crack for the bears.

Ahead of that, the $1940 area would act as a support zone, the intersection of the Fibonacci 23.6% one-day, previous low on four-hour and SMA10 one-hour.

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


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