Gold wallows in four-month troughs below $1830, as the bears take a breather before the next push lower. Reports of US President-elect Joe Biden’s White House transition gave an added boost to the recent market optimism, induced by the coronavirus vaccine progress.
Investors flocked towards riskier assets, shunning the non-yielding gold, as strong US business activity data and vaccine optimism boosted hopes for a quicker economic recovery. Improving global economic outlook diminishes the need for additional stimulus, which weighs on gold.
Let’s see how gold is positioned on the charts.
The Technical Confluences Indicator shows that the XAU/USD pair is attempting a tepid bounce towards the $1829 barrier, which is the Pivot Point one-week S2.
Acceptance above the latter could expose the next strong hurdle at $1832, the convergence of the previous day low and Bollinger Band one-day Lower.
A sustained breakthrough at that level could trigger a quick advance towards $1842, where the Fibonacci 23.6% one-day is located.
Alternatively, powerful support at $1818 guards the downside. That level is the Pivot Point one-month S2.
A sharp drop could on a failure to defend the latter, with the next cushion of the Pivot Point one-week S3 at $1805 on sellers’ radars.
Here is how it looks on the tool
About Confluence Detector
The TCI (Technical Confluences Indicator) 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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