• XAU / USD extended its losses in a lengthy response to the Fed’s decision.
  • The confluence detector shows that XAU / USD has considerable support at $ 1,766.
  • Gold handles overnight rebound after strong sell signal

Where’s the bottom? That’s the question asked by those who trade gold – and any other asset denominated in US dollars. The greenback’s rise was relentless following the hawkish US Federal Reserve move on Wednesday. The world’s most powerful central bank is set to print fewer dollars and hike rates sooner rather than later.

The precious metal has an inverse correlation with the US currency and it is falling despite falling bond yields. How is XAU / USD positioned on technical charts?

Technical confluence detector shows gold has critical support at $1766, which is the convergence of the previous month’s low and the 1-hour lower Bollinger Band.

Lower down, a soft cushion awaits you at $1,751, this is where the Pivot Point 1 One Day Support hits the price.

Looking up, initial resistance is at $1781, which is the confluence of the 10-15m simple moving average and 23.6% Fibonacci one day.

The next level to watch is $1790, this is where the 38.2% one-day fibonacci and the previous 4h low meet.

XAU / USD Resistance and Support Levels

Confluence detector

The confluence detector finds interesting opportunities using technical confluences. The TC is a tool to locate and report price levels where there is a clutter of indicators, moving averages, Fibonacci levels, pivot points, etc. Knowing where these congestion points are is very useful for the trader, and can be the basis for different strategies.

Learn more about Confluence Technique

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Al Worden

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