Gold Price Analysis: XAU/USD trapped in clear range, ready to explode – Confluence Detector

How high is US inflation? That question is keeping traders nervous as it is set to shape the fate of the Federal Reserve’s bond-buying scheme. The US releases fresh Consumer Price Index statistics on Tuesday and tensions are mounting and keeping ranges narrow. 

XAU/USD is also confined between strong resistance and strong support. According to technical analysis textbooks, that implies a significant move later down the line. While the direction depends on the data, the battle lines are clear. 

The Technical Confluences Detector is showing that XAU/USD has support at $1,794, which is the convergence of the Fibonacci 38.2% one-day, the Fibonacci 23.6% one-week, the Simple Moving Average 100-1h and more. 

Substantial resistance is at $1,801, which is where the Fibonacci 38.2% one week and the Bollinger Band one-day Middle meet up.

Looking further up, the distant target for gold is $1,815, which is the confluence of the Pivot Point one-day R3 and the 100-day SMA. 

On the downside, bears are targeting $1,778, which is a juncture that includes the Fibonacci 61.8% one-month and the PP one-day S2. 

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.

Learn more about Technical Confluence

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