Gold Price Analysis: Battle lines well-mapped for XAU/USD ahead of US stimulus deadline – Confluence Detector

Dhwani Mehta FXStreet

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.

Learn more about Technical Confluence

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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