Gold Price Analysis: XAU/USD path of least resistance is down, $1,777 eyed – Confluence Detector
- XAU/USD has slipped below $1,800 as the dollar dismisses higher inflation.
- The Confluence Detector is showing Gold is capped by strong resistance at $1,798.
- Gold Weekly Forecast: XAU/USD snaps four-week winning streak, eyes on US CPI data
Inflation is cooling off – but the US dollar refuses to follow suit. While the prospects of a delay to the Federal Reserve's tapering scheme is adverse for the dollar and positive for gold, the greenback is benefiting from concerns about global growth and the precious metal is struggling.
Will this tendency continue? Technicals show that there is more room for the downside than the upside.
The Technical Confluences Detector is showing that XAU/USD faces fierce resistance at $1,798, which is a dense cluster including the Fibonacci 38.2% one day, the Bollinger Band 1h-Lower, the Simple Moving Average 100-4h and more.
That level is backed up by another significant cap at $1,801, which is the convergence of the Fibonacci 38.2% one-week, the BB 15min-Middle, and the BB one-day Middle.
Some support awaits at $1,782, which is the meeting point of the BB 4h-Lower and the previous week's low.
Further down, $1,777 is where gold bears have their target set – it is the confluence of the Fibonacci 61.8% one-month and the BB one-day Lower.
XAU/USD resistance and support levels
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.
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
