Gold Price Analysis: XAU/USD eyes $1942 as the next upside target – Confluence Detector
|Kicking-off 2021 on a positive note, gold (XAU/USD) is holding onto weekly highs well above $1900, as the beleaguered US dollar continues to lick its wounds from 2020. Concerns over the coronavirus contagion and the likely tightening of restrictions globally boost the safe-haven appeal of gold.
Further, gold also benefits from caution ahead of the runoff Senate elections in Georgia, as traders brace for choppy trading ahead of the key US NFP release in the first full week of 2021. How is gold positioned on the charts?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that the path of least resistance is to the higher side, as XAU/USD has recaptured a minor resistance now support at $1922. That level is the pivot point one-week R2.
The bulls now eye the immediate barrier at $1926, which the previous high on four-hour.
Acceptance above the latter could trigger a quick rally towards $1942, the pivot point one-week R3.
The next strong hurdle is seen at $1948, where the pivot point one-month R1 lies.
On the flip side, a breach of the abovementioned cushion at $1922 could expose powerful support at $1911, where the previous low four-hour, pivot point one-week R1 and Bollinger Band one-day Upper coincide.
The next downside target awaits at the intersection of the SMA5 four-hour and previous month high at $1908.
A dense cluster of healthy support levels is aligned just above $1900, which is the convergence of the previous week high, Fibonacci 61.8% one-day and pivot point one-day R1.
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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