Gold (XAU/USD) is licking its wounds after plummeting 3% on Monday, as the haven demand for the US dollar resurfaced amid growing coronavirus risks and US fiscal deadlock. The greenback jumped to six-week highs across its main competitors on concerns over the global economic recovery, especially after localized lockdowns were announced in key European economies.
The Technical Confluence tool shows that gold failed to sustain the rebound from six-week lows above the powerful barrier at $1915, which is a convergence of the Fibonacci 23.6% one-month and previous high on 15-minutes.
Therefore, the sellers now probe the next downside target at $1910, where the Fibonacci 38.2% one-day, SMA10 one-hour and previous low four-hour intersect.
The Fibonacci 161.8% one-week at $1907 is a soft cap, which could be tested if the bulls fail to defend the $1910 level.
Acceptance below the latter could trigger a sharp sell-off towards $1891, the pivot point one-week S3.