Gold Price Analysis: XAU/USD eyes $1,842 immediate resistance amid lacklustre trading – Confluence Detector
|Gold prices recover to $1,838, up 0.08% intraday, while heading into Monday’s European session. Although a lack of major catalysts weighs on the yellow metal, the latest chatters concerning the US-China tussle and Japan’s stimulus help the commodity buyers to remain optimistic despite Friday’s losses.
Early in Asia, Reuters came out with the news suggesting the Trump administration’s readiness for further sanctions on the policymakers from China’s Communist Party (CCP). The news precedes China’s weaker than expected imports of 4.1% YoY for November, which in turn suggests the brewing trade war.
Elsewhere, Japanese Prime Minister (PM) Yoshihide Suga recently showed readiness to decide further economic measures tomorrow. The national leader also said that the economic measures to include loans and more reserve funds.
On a different note, Brexit jitters continue whereas vaccine hopes gain momentum with Russia ready for distribution of its vaccine while China’s Sinovac announced that it aims to complete construction of second production facility by the end of 2020 to increase annual covid-19 production capacity to 600 million doses.
Against this backdrop, S&P 500 Futures print mild losses while the US 10-year Treasury yields also dwindle. Further, commodities remain mildly positive while the US dollar index (DXY) fails to keep late Friday’s gains while staying heavy near April 2018 lows, marked during the last week.
Gold: Key levels to watch
Having successfully cleared $1,836 resistance, now support, comprising the Simple Moving Average (SMA) 10 on hourly (1H), gold is up for confronting the $1842 resistance confluence including Fibonacci 38.2% one-month.
Though, a sustained break above $1,842 will open the path of least resistance towards $1,845, comprising the middle Bollinger on the daily chart and upper Bollinger on 1H.
It should, however, be noted that the yellow metal’s ability to cross $1,845 enables it to eye $1,850 round-figure with Pivot Point one-day (D1) Resistance 1 around $1,847 and the previous high on D1 around $1,848.
On the contrary, a downside break below $1,836 highlights Fibonacci 23.6% one-month, near $1,829 with $1,833 including the middle Bollinger on four-hour (4H) acting as intermediate halt.
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Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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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