XAU/USD buyers hold out hope above $1,644 – Confluence Detector

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  • The price of gold weakened on its previous rebound as the US dollar rallied.
  • Cooling aggressive Fed rate hike calls, China concerns and dismal US tech results are weighing on risk sentiment.
  • XAU/USD sees range play amid well-defined battle lines ahead of critical events in the US.

The price of gold is treading water in a familiar range around the psychological $1,650 level, lacking a follow-up bullish bias amid a modest rally staged by the US Dollar across the board. Risk flows returned to markets as disappointing results from US tech giants Microsoft and Google rekindled recession fears and revived the appeal of the dollar as a safe haven. However, weak Treasury yields, driven by risk aversion, combined with the easing of aggressive Fed rate hike expectations are mitigating the shine metal’s decline. Investors are also refraining from placing big bets on bullion ahead of the risks of critical events, including the ECB’s rate hike decision and third quarter US GDP advance, expected later this week. US corporate earnings reports and China covid updates will be closely watched for any impact on risk sentiment, which will be key to further dollar and gold valuations.

Read also: Markets remain stable as investors focus on earnings and the ECB

Gold price: Main levels to watch

The technical confluence detector shows gold price flirting with a bunch of healthy support levels at around $1,650, the convergence of the one-hour SMA50, one-day SMA10 and previous four-hour low .

The next cushion is placed at $1,648, where the 61.8% 1-day Fibonacci meets the 38.2% 1-week Fibonacci.

The last line of defense for XAU buyers is seen at $1,644, the intersection of SMA5 one day and Fibonacci 23.6% one month.

Alternatively, the price of gold needs to clear the week-and-day 23.6% Fibonacci convergence at $1,657. A firm break above the latter will trigger a further rally towards the 38.2% Fibonacci month on month at $1,660.

The previous day’s high at $1,662 will be next on buyers’ radars.

This is what it looks like on the tool

About the Technical Confluence Detector

The TCD (Technical Confluences Detector) is a tool for locating and signaling price levels where there is congestion of indicators, moving averages, Fibonacci levels, pivot points, etc. If you are a short-term trader, you will find entry points for countertrend strategies and chasing a few points at a time. If you are a medium-long term trader, this tool will allow you to know in advance the price levels where a medium-long term trend can stop and rest, where to unwind positions, or where to increase your post size.

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