Gold (XAU/USD) remains in limbo, as it continues with the range play around $1900. A lack of progress and clarity on the US fiscal stimulus keeps the XAU bulls unmotivated. Meanwhile, the US dollar draws bids amid increased haven demand, as a sense of caution prevails across the financial markets ahead of the deadline to reach an agreement on a new aid package.
With the US policymakers still unclear whether a stimulus package can be passed before the Nov 3 election, gold is likely to have a hard time maintaining its upside momentum, in absence of new funds. How is gold positioned technically?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the yellow metal is trapped between key barriers, with the downside more compelling amid a dense cluster of resistance levels stacked up.
Powerful resistance is placed around $904-1905, which is the convergence of the Fibonacci 61.8% one-day, previous high four-hour and SMA50 one-hour.
The bulls would then confront the next soft cap at $1909, the Fibonacci 23.6% one-day. Further north, a sustained move above the $1913 level is needed to revive the upside momentum.
To the downside, $1895 is strong support, which the intersection of the pivot point one-day S1 and Fibonacci 23.6% one-week.
Acceptance below the latter could trigger a fresh sell-off towards $1883, which is a critical level to beat for the bears. At the point, the Fibonacci 23.6% one-month coincides with the previous week low.
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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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