XAU/USD decline remains compelling below $1,821 – Confluence Detector
- The price of gold remains vulnerable as the US dollar rebounds in a lackluster mood.
- A pullback in US Treasury yields helps cushion the decline in XAU/USD.
- The path of least resistance appears downward for the price of gold.
The price of gold fluctuates between gains and losses as it hovers above the $1,800 mark, licking its wounds after Tuesday’s rejection of the critical $1,836 hurdle. The price of gold is facing headwinds from renewed safe-haven demand for the U.S. dollar as investors fret over growth and inflation concerns amid aggressive expectations of Fed rate hike. On the other hand, the negative shift in market perception of risk boosted risk aversion flows into US government bonds, capping the rebound in Treasury yields across the curve. Falling yields offer support for XAU/USD bulls. Going forward, in the absence of relevant economic data from the US, the price of gold will remain at the mercy of risk sentiment and dollar momentum.
Read also: Gold Price Prediction: XAU/USD eyes retest of multi-month lows below $1,800
Gold price: Main levels to watch
The Technical Confluence Detector shows gold price holding its range below a dense cluster of powerful stacked resistance around $1,817. This supply zone is the convergence of the SMA5 four hour, Fibonacci 23.6% week and day.
The next stop for bulls is seen at $1,821, where the one-hour SMA100 and four-hour SMA10 converge with the 38.2% one-day Fibonacci.
Higher up, gold buyers will face the 1-day SMA5 and 1-day Fibonacci 61.8% at $1,825 and $1,828 respectively.
The one-week 38.2% Fibonacci at $1,833 is the level to beat for gold bulls.
On the downside, if the selling bias accelerates, the previous day’s low at $1,813 will be removed.
Gold sellers will then target the $1,807 demand zone, where the S1 one-day pivot point and the previous four-hour low coincide.
The previous week’s low at $1,799 will then come to the rescue of gold optimists, below which the 1-month S2 pivot point at $1,797 will come into question.
This is what it looks like on the tool
About the Technical Confluence Detector
The TCD (Technical Confluences Detector) is a tool for locating and signaling price levels where there is congestion of indicators, moving averages, Fibonacci levels, pivot points, etc. If you are a short-term trader, you will find entry points for countertrend strategies and chasing a few points at a time. If you are a medium-long term trader, this tool will allow you to know in advance the price levels where a medium-long term trend can stop and rest, where to unwind positions, or where to increase your post size.