Gold (XAU/USD) wavers in a familiar range on the US election day this Tuesday, as a sense of caution sets amid a tighter presidential race in key six swing states. The US dollar remains on the back foot amid the upbeat market mood, fuelled by the stronger-than-expected US and Chinese Manufacturing PMIs.
The bull-bear tug-of-war could likely extend, as investors will refrain from placing any directional bets on gold ahead of the election outcome. A ‘blue sweep’ is the only thing the gold buyers could ask for. In the meantime, the risk of a contested election keeps the upside in check. Let’s take a look at the key technical levels in the run-up to the election showdown.
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the yellow metal is likely to face an uphill battle to take on the upside, with the immediate barrier seen around $1896, the intersection of the previous day high and SMA10 one-day.
The next major hurdle awaits at $1899, which is the convergence of the previous high on four-hour and SMA200 four-hour.
To the downside, the bears guard the $1891 cap, where the SMA100 one-day lies.
A failure to resist above the latter could call for a test of the next relevant support placed at $1888, the Fibonacci 38.2% one-month.
Further south, SMA5 one-day at $1885 could challenge the bears’ commitment, opening floors towards $1883, which is the SMA200 15-minutes support.
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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