Gold has suffered a sell-off on Thursday, dipping below $1,700 and struggling to recapture that level. Does it have room to recover? XAU/USD may be facing an uphill battle.
The Technical Confluences Indicator is showing that gold faces initial resistance at $1,707, which is the convergence of the Fibonacci 61.8% one-month and the Bollinger Band 15min-Upper.
Further above, the precious metal faces a hard cap at $1,721, which is a juncture including the Simple Moving Average 50-1h, the SMA 200-15m, the Fibonacci 61.8% one-week, and more.
Some support awaits at $1,703, which is the confluence of the Pivot Point one-week Support 1, the SMA 5-1h, and the BB 15min-Middle.
Further down, weaker support awaits at $1,694, which is where the previous weekly low and the 50-day SMA converge.
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.