Gold Price Analysis: Topping these two hurdles crucial to next coronavirus-related rally above $1,700
Gold surged above $1,700 in but was later slapped back down amid extreme volatility conditions. Coronavirus fears were dominant on Monday but markets are bouncing on Tuesday in what looks like a dead-cat bounce. Where next for XAU/USD? Two resistance lines cap the upside and breaking above them may send gold higher.
The Technical Confluences Indicator is showing that critical resistance at $1,663, which is the convergence of the Simple Moving Average 100-1h, the Pivot Point one-month Resistance, and the Bollinger Band 15min-Middle.
The second hurdle that Gold needs to cross to unleash the upside is at $1,665, which is the meeting point of the SMA 5-1h and the Fibonacci 23.6% one-week.
Support awaits at $1,658, which is the confluence of the previous daily low, the BB 1h-Lower, and the PP one-day S1.
Further down, the next cushion is at $1,647, where the SMA 200-1h and the Fibonacci 38.2% one-week.
More: Gold Price Forecast: Logs Biggest Weekly Gain Since February 2016, focus on coronavirus-related developments
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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