Gold Price Analysis: XAU/USD’s path of least resistance is down, $1913 back in sight – Confluence Detector

Following Tuesday’s two-way wild swings, Gold (XAU/USD) returns to the backseat, as the haven demand for the US dollar remains in vogue amid the risk-off action in the global stocks. The sentiment soured on rising US-Sino tensions, US fiscal deadlock and pessimism over the coronavirus vaccine. AstraZeneca COVID-19 vaccine trial was put on hold over safety concerns.  

Although the dovish ECB expectations and falling Treasury yields offer some support to the yieldless gold. Combined. Let’s take a look at the key technical levels for trading gold amid a light US docket and heading towards Thursday’s crucial ECB policy decision.  

Gold: Key resistances and supports

The tool shows that gold is battling a significant upside hurdle at $1928.50, the confluence of Fibonacci 38.2% one-day and SMA10 four-hour, following a brief dip to $1923 region.

Acceptance above the latter could add extra legs to the bounce, as the bulls look to test the next critical hurdle at $1934.45, where the Fibonacci 23.6% one-week, SMA5 one-day and Fibonacci 23.6% one-day intersect.

Further north, powerful resistance awaits at $1945/46, which is the convergence of the SMA10 one-day, Fibonacci 38.2% one-month and one-week.

A firm break above the latter could yield a test of $1949 barrier, the SMA50 on four-hour.

To the downside, minor supports at $1920 (Fibonacci 61.8% one-day) and $1917 (previous week low) could slow the declines.

Meanwhile, a $1913 cushion is the level to beat for the bears. That level is the Fibonacci 23.6% one-month.

A daily closing below the last is needed to reinforce the bearish bias.

Here is how it looks on the tool

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About the Confluence Detector

With the TCI (Technical Confluences Indicator) 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. If you are a medium- and long-term trader, this tool will allow you to know in advance the price levels in which a medium / long-term trend can stop your travel and rest, where to undo positions or where to increase your position.

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