Gold Price Analysis: XAU/USD’s bearish bias intact, acceptance below $1944 critical – Confluence Detector

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Gold’s (XAU/USD) correction from record highs of $2075 has regained traction this week, with the August low of $1863 taken out, thanks to the relentless surge in the US dollar’s safe-haven demand. Global economic recovery worries amid coronavirus resurgence in key economies and central banks’ on hold monetary policy outlooks continue to fuel the dollar’s rally.  

The bright metal extends Wednesday’s 2% sell-off this Thursday, down for the fourth day in a row, as bear eye a test of the critical support at $1844.  How is gold positioned on the chart ahead of the US Jobless Claims data and Day 3 of the Fed Chair J. Powell’s testimony.

Gold: Key resistances and supports

The Technical Confluence tool suggests that gold’s path of least resistance appears to the downside, with immediate soft cushion seen at $1949, which is the previous low on one-hour.

The fierce support at $1944, the convergence of the SMA100 one-day, pivot point one-day S1 and Bollinger Band one-hour Lower, is the level to beat for the bears.

A fresh sell-off will be triggered on a breach of the latter, opening floors towards the July low of $1806.

On the flip side, recapturing the $1863 level with conviction is critical for the recovery to gain momentum. That level is the confluence of the previous month low and pivot point one-month S1.

Further north, the buyers will challenge the $1868 hurdle, where the Fibonacci 61.8% one-day and Bollinger Band 15-minutes Upper coincide.

The next strong cap sits at $1875, which is the Fibonacci 38.2% one-day.

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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