Gold Price Analysis: Tough supports limit declines – Confluence Detector
|The greenback is on recovery mode, correcting some of the ground lost in the previous one, although far from bullish. Quite a negative market’s mood prevails as the coronavirus pandemic remains out of control. Gold holds on to higher ground around $1,620 a troy ounce.
The Technical Confluence Indicator shows that for XAU/USD the upside is cleaner than the downside, as it holds above a strong support area between 1,618 and 1,621. At the lower end of the range, the bright metal presents convergent Bollinger Band 4h-Middle and the daily 23.6% Fibonacci retracement.
Bulls have a clearer path ahead, as a relevant resistance level comes at 1,625.80, where the metal has the 61.8% retracement. Above it, there’s nothing in the way ahead of 1,631.
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.
This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. This means that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.
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