Gold Price Analysis: XAU/USD braces for a bumpy road to recovery above $1775 – Confluence Detector
|Gold (XAU/USD) is making another recovery attempt from five-month lows of $1765 as the US dollar dips on improved market mood amid coronavirus vaccine and US stimulus hopes. US Treasury Secretary Steve Mnuchin’s push for utilizing $455 billion from the CARES Act also bodes well for gold.
Although, gold’s corrective advance could lose steam, in the wake of hopes for an imminent vaccine rollout. Optimism over a swift vaccine-driven economic recovery diminishes gold’s attractiveness as a safe-haven. Focus shifts to the US data dump and Fed Chair Powell’s testimony.
How is gold positioned on the price charts?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair shows that the bright metal is looking to extend its recovery towards the critical $1800 level, which is the convergence of the Fibonacci 23.6% one-week, SMA100 one-hour and SMA200 one-day.
On its way to the abovementioned barrier, gold is likely to face strong offers around $1790, which is a cluster of dense resistance levels, comprising of the previous day high and Pivot Point one-day R1.
To the downside, an immediate cushion is seen at $1778, where the SMA5 four-hour coincides with the previous low on one-hour.
Further down, the earlier powerful resistance now support at $1775 could be challenged. That level is the intersection of the Fibonacci 38.2% one-day and the previous week low.
The next soft cap awaits at $1770, the convergence of the Fibonacci 23.6% one-day and Bollinger Band one-day Lower.
The confluence of the Pivot Point one-day S1, Bollinger Band four-hour Lower and previous day low at $1765 is the last resort for the XAU bulls.
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.