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Gold is looking to snap its three-day downtrend, attempting a bounce above the $1,800 mark amid a minor pullback in the US Treasury yields. A corrective upside in gold price cannot be ruled out ahead of Wednesday’s US data dump and FOMC minutes, as markets reposition after the biggest daily loss incurred since mid-September.
Gold price tumbled 2% on Monday after Jerome Powell’s renomination as the Fed Chair triggered a sharp rally in the US Treasury yields on expectations of a faster pace of Fed’s tapering.
Read: Gold Price Forecast: XAU/USD eyes dead cat bounce towards $1,830 amid oversold RSI, focus on yields
The Technical Confluences Detector shows that the gold price is retreating towards the previous day’s low of $1,802.
The psychological $1,800 threshold will gain the sellers’ attention on a sustained move lower. At that level, the pivot point one-week S3 coincides.
The Fibonacci 23.6% one-month at $1,798 will be a tough nut to crack for gold bears.
If that caves in, then powerful support around $1,793 will challenge the bullish commitments. That point is the intersection of the SMA100 and SMA200 one-day.
Alternatively, stiff resistance is seen around $1,814, which is the convergence of the previous month’s high, Fibonacci 23.6% one-day and Bollinger Band four-hour Lower.
Acceptance above the latter will threaten the immediate cap at $1,817, the pivot point one-month R1.
The next significant upside barrier is envisioned at $1,821, the confluence of the pivot point one-week S2 and Fibonacci 38.2% one-day.
The TCD (Technical Confluences Detector) 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. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.