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Forex Analysis & Reviews: Gold: confluence area as support
time 30.11.2022 07:17 PM
time Relevance up to, 01.12.2022 07:17 PM

The price of gold crashed after reaching 1,764 today's high. It has turned to the downside as the USD dominated the currency market. The dollar Index's rally forced the greenback to take the lead and forced XAU/USD to drop.

As you already know, the USD rallied, even though the US reported mixed economic data. ADP Non-Farm Employment Change, Goods Trade Balance, and Chicago PMI came in worse than expected, while Prelim GDP, JOLTS Job Openings, and Pending Home Sales reported better than expected data.

Later today, Fed Chair Powell's Speaks could have a big impact as well and could bring sharp movements. Tomorrow, the Switzerland CPI, the US ISM Manufacturing PMI, and the Core PCE Price Index are seen as high-impact events.

XAU/USD Sell-Off!

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XAU/USD failed once again to stabilize above 1,761 and now it could approach and reach the uptrend line and the weekly pivot point of 1,747. We have a strong confluence area at the intersection between these support levels.

As long as it stays above the support levels, XAU/USD could try to recover after its sell-off. The asset could try to develop a new bullish momentum.

XAU/USD Forecast!

A false breakdown through the confluence area may announce a new bullish momentum, this could bring new buying opportunities. A larger upwards movement could be activated only after making a valid breakout above 1,761.

A valid breakdown through the confluence area activates more declines and is seen as a selling opportunity.

Ralph Shedler,
Analytical expert of InstaForex
© 2007-2023
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