Gold Price Analysis: XAU/USD eyes $1864 upside target amid US stimulus hopes – Confluence Detector
|Gold (XAU/USD) extends a three-day winning streak on Tuesday, looking to regain the $1850 level. The road to recovery from two-month troughs picks up pace amid an imminent approval of the US $1.9 trillion stimulus package by Congress. Growing optimism on the stimulus is pushing the US inflation expectations, underpinning the inflation-hedge gold.
However, rising longer-term inflation expectations also drive the Treasury yields higher, posing a risk to the rally in gold. Let’s take a look at how is gold positioned technically.
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that gold is looking to find acceptance above the critical resistance at $1844, which is the confluence of the previous high four-hour, SMA100 four-hour and Fibonacci 23.6% one-month.
The next significant target for the bulls awaits at $1864, where the Fibonacci 38.2% one-month coincides with the SMA200 four-hour.
Ahead of that level, a bunch of minor resistance levels are stacked up around $1860, which is the intersection of the SMA50 one-day and pivot point one-week R1.
Meanwhile, immediate support is seen at $1837, the convergence of the Fibonacci 61.8% one-week, SMA5 one-hour and previous day high.
The next cushion is aligned at $1834, where the SMA200 one-hour and SMA10 one-day intersect.
The SMA10 four-hour support at $1826 could come into play, below which the sellers would aim for $1818, the meeting point of the SMA50 one-hour and Fibonacci 38.2% one-week.
Powerful support at $1808 (previous day low) is the level to beat for the XAU bears.
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.