Gold has suffered a trip to the downside but recovered and is back to the familiar range. What is next for the precious metal? Examining the XAU/USD is showing that strong resistance looms.
The Technical Confluences Indicator is showing that $1,730 remains a strong resistance line, where we see a cluster including the Fibonacci 23.6% one-week, the Fibonacci 23.6% one-day, the Fibonacci 38.2% one-month, and the Bollinger Band 15min-Upper.
If gold overcomes this hurdle, the upside target is $1,743, which is the convergence of the Pivot Point one-day Resistance 2 and the Fibonacci 23.6% one-month.
Some support awaits at $1,722, which is the confluence of the Bollinger Band one-day Middle, the Fibonacci 61.8% one-day, and the BB 1h-Lower.
The downside target for the bears is $1,707, where the Fibonacci 161.8% one-day and the Fibonacci 61.8% one-month meet up.
Here is how it looks on the tool:
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. These weightings mean 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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