Gold (XAU/USD) is nursing losses after three consecutive days of declines, although remains in a familiar range above $1850. The renewed concerns about a $900 billion COVID-19 relief package could likely keep gold on the back foot. US President Donald Trump asked for an amendment to the pandemic relief package.
However, broad-based US dollar retreat cushions the downside in gold. Brexit deal optimism and disappointing US Consumer Confidence data weigh negatively on the greenback. Pre-Christmas thin trading conditions will continue to play out ahead of the US economic releases.
How is gold positioned on the charts?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair is struggling to overcome a dense cluster of resistance levels stacked up around the $1867-69 region.
That area is the confluence of the Fibonacci 38.2% one-week, SMA5 four-hour and the previous high four-hour.
A firm break above the latter could expose a minor cap at $1874, which is the convergence of the SMA5 one-day and Fibonacci 61.8% one-day.
Up next, the bulls are likely to challenge the critical barrier at $1880, the intersection of the Pivot Point one-day R1, Fibonacci 23.6% one-week and Bollinger Band four-hour Middle.
To the downside, minor support awaits at $1861, where the SMA200 one-hour coincides with SMA50 four-hour and the previous low four-hour.
The SMA10 one-day at $1856 is the next relevant downside target, below which the Pivot Point one-day S1 of $1852 could be probed.
The bears need a break below the $1850 barrier to reviving the bearish bias. The Fibonacci 61.8% one-week is aligned at that level.
Here is how it looks on the tool
About Confluence Detector
The TCI (Technical Confluences Indicator) 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.
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