Having tested the $1800 level, Gold (XAU/USD) extends Monday’s swift recovery ahead of the much-awaited Treasury Secretary nominee Janet Yellen’s Senate hearings. Yellen is set to endorse a bigger coronavirus relief package.
Meanwhile, President-elect Biden will push for the $1.9 trillion stimulus plan once he takes the office on January 20. Expectations of additional fiscal support to fight the pandemic recession continue to bode well for the inflation-hedge, gold. Let’s take a look at how the metal is positioned on the charts.
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that gold sees healthy support levels, with the immediate cushion seen at $1836, which is the confluence of the SMA5 four-hour, Fibonacci 38.2% one-week and Bollinger Band one-hour Middle.
The next major support awaits at the Fibonacci 23.6% one-week at $1828, below which $1826 could challenge the bears’ commitment. At that level, the Fibonacci 61.8% one-month coincides with the Fibonacci 38.2% one-day.
Further south, the intersection of the previous week low and Fibonacci 61.8% one-day at $1818 will guard the downside before testing the $1816 cap – pivot point one-month S1.
Alternatively, the bulls need to crack the Fibonacci 61.8% one-week at $1846 to extend the recovery momentum from over one-month lows of $1803.
The next significant resistance is aligned at $1854, the pivot point one-week R1. A break above the latter could expose $1858, which is the convergence of the Fibonacci 38.2% one-month and and SMA50 four-hour.
The SMA50 one-day at $1860 is the level to beat 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.
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