Gold (XAU/USD) extends its bearish streak into the third straight day on Wednesday, although remains in a familiar range below $1900. Markets weigh in the optimism over the promising vaccine results against the backdrop of the coronavirus surge and new restrictions announced globally.
The US dollar finds its foot as covid fears resurface and reignite global economic growth concerns. Let’s see how gold is positioned technically amid coronavirus developments and the latest chatter over the US fiscal stimulus.
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair is defending the strong $1877 support, which is the convergence of the previous day low, Fibonacci 23.6% one-week and one-month.
Acceptance below the last is likely to trigger a sharp drop towards a minor cap aligned at $1868, the pivot point one-day S2.
The next critical support of the previous month low of $1860 will be on the sellers’ radars.
On the flip side, gold is likely to face a cluster of resistance levels if it recovers some ground towards the relevant upside hurdle at $1888, which is the intersection of the SMA50 one-hour and Fibonacci 38.2% one-month.
Further north, the pivot point one-day R1 at $1891 will challenge the upward journey.
However, $1894 will be a tough nut to crack for the bulls, as it is the confluence of the previous day high, SMA100 four-hour and Fibonacci 38.2% one-week.
Here is how it looks on the tool
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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