Gold Price Analysis: Corrective pullback stalls at key $1933 support, what’s next? – Confluence Detector
Gold (XAU/USD) recorded a fresh all-time high above $1980, as the quest for the psychological $2000 level continues on Tuesday.
An unprecedented Fed’s stimulus, falling real rates into the negative territory and US fiscal deadlock weighed on the US dollar, benefiting the yieldless gold. Further, growing concerns over the economic impact of the coronavirus pandemic also collaborated with the upside in the traditional safe-haven.
The yellow metal, however, failed to hold up at higher levels and saw a quick drop of about $35, as the greenback retraced some of its recent losses. Let’s look at the key levels for trading gold in the day ahead, as suggested by the Technical Confluences Indicator.
Key resistances and supports
The tool shows that the bright metal tested a cluster of strong support levels around $1935/33 on a sharp corrective slide from near the record highs. That zone is the confluence of the Fibonacci 23.6% one-day, pivot point one-month R3 and pivot one-week R1.
The metal then bounced-off the key support, with the recovery attempt seen capped around $1950, the previous day high.
Acceptance above the latter will open doors towards the retest of the record highs at $1981.34. A brief phase of consolidation could be seen before the bulls take on the $2000 level.
Alternatively, a sustained break below the aforesaid powerful support around $1935 could see the downside target at $1930, the confluence of the Fibonacci 38.2% one-day and SMA10 four-hour.
The next cushion is directly aligned at $1919, the Fibonacci 61.8% one-day.
Here is how it looks on the tool
About the Confluence Detector
With the Confluence Detector tool, you can easily locate areas where the price can find a support zone or resistance zone and make trading decisions. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points each time.
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.
