Gold Price Analysis: Battle lines well-mapped for XAU/USD ahead of critical US data – Confluence Detector

Gold (XAU/USD) continues to face rejection at higher levels, as the US dollar attempts a tepid bounce from multi-week lows amid covid vaccine and China concerns-led risk-aversion. Also, investors could resort to profit-taking on their dollar trades after the recent sell-off and ahead of the critical US Jobless Claims and Retail Sales data.  

Gold fell on Wednesday amid a steady recovery in the US Treasury yields across the curve.  However, the metal remained in a familiar range, with a breakout awaited on the US data release.  

In the meantime, how is gold positioned on the charts?

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold’s upside is capped near $1741, where the Fibonacci 38.2% one-day, SMA50 four-hour and Bollinger Band four-hour Middle converge.

A dense cluster of healthy resistance levels then awaits the XAU bulls around $1745, the intersection of the SMA5 one-day, Fibonacci 61.8% one-day and Fibonacci 38.2% one-week.

Further, fierce resistance at $1750 will continue to test the bulls’ commitments. At that level, the previous day high coincides with the Fibonacci 23.6% one-week.

The next upside target is aligned at the pivot point one-month R1 at $1753.

On the flip side, strong support near $1735, the confluence of the Fibonacci 23.6% one-day, SMA10 one-day and Fibonacci 61.8% one-week, is likely to guard the immediate downside.

The previous day low of $1733 could offer some support to the XAU bulls, below which powerful cap awaits at $1728, the Fibonacci 61.8% one-month.

The meeting point of the pivot point one-month and Tuesday’s low at  $1724 could be a tough nut to crack for the sellers.

Here is how it looks on the tool

About Technical Confluences Detector

The TCD (Technical Confluences Detector) 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.