Gold Price Analysis: Path of least resistance remains to the upside after topping $1,730 – Confluence Detector
|After hitting new seven-year highs, the gold price has continued advancing and has topped $1,730. What are the next targets for precious metal? The Federal Reserve's massive printing and the return of traders after Easter are behind the upside move.
A quick look already reveals that XAU/USD has stronger support than resistance.
The Technical Confluences Indicator is showing that minor resistance awaits at $1,731, which is the meeting point of the most recent high and the Pivot Point one-day Resistance 1.
It is followed by $1,742, which is a major hurdle – where the Pivot Point one-week Resistance 2 hits the price. The next level is $1,749, which is when yet another Pivot Pointe, the one-day R2, is seen.
Strong support awaits at $1,728 – the previous target – which is the convergence of the Bollinger Band one-day Upper, the previous 4h-high, and the Simple Moving Average 5-15m. This cluster of support stands out on the chart and is more robust than the resistance lines mentioned beforehand.
Further down, at $1,724, the previous daily high, the SAM 5-1h, and the BB 15min-Middle all meet.
The next considerable cushion is at $1,714, which is the confluence of the Fibonacci 23.6% one-day and the PP one-week R1.
Here is how it looks on the tool:
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.
This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.
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