Gold Price Analysis: XAU/USD levels to watch after the correction – Confluence Detector
- Gold has corrected to the downside after receiving a boost from the Fed.
- The Confluence Detector is showing XAU/USD is holding up above critical support.
- Gold Price Forecast: Why $1830 continues to lure XAU/USD buyers? Focus on US data
Every trend has a countertrend – and the same goes for gold, which has significantly benefited from the Federal Reserve's dovish stance. However, bulls take profits on both XAU/USD longs and dollar shorts. As August draws to an end, money managers are adjusting their portfolios and rebalancing their books, causing jitters in the markets.
The next substantial market mover is Nonfarm Payrolls due out only on Friday. However, investors are still not focusing on that, and technicals may have a more significant impact on the precious metal. How is gold positioned on the charts?
The Technical Confluences Detector is showing that XAU/USD has some support at $1,809, which is the convergence of the Fibonacci 23.6% one-week, and the all-important 200-day Simple Moving Average.
An even more considerable cushion awaits at $1,805, which is a juncture including the Pivot Point one-day Support 1, the Fibonacci 38.2% one-week, and the 5-day SMA.
Initial resistance is at $1,814, which is a dense cluster of lines including the Fibonacci 38.2% one day, the Bollinger Band 15min-Middle, and the SMA 50-15m.
Once the dust settles and September begins, the upside target is $1,834, which is where the previous month's high and the Fibonacci 161.8% one-day converge.
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