Gold Price Analysis: Key levels to watch as XAU/USD sees a dead cat bounce – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) is attempting a minor bounce from six-week lows of $1817. However, the further upside appears elusive as the Treasury yields continue its surge on US stimulus hopes and drive the US dollar higher.

Investors remain hopeful that US President-elect Joe Biden will announce a bigger fiscal stimulus package when he makes an important economic speech on Thursday.

How is gold positioned on the charts heading into a new week?

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold has recaptured strong resistance at $1927, which is the Fibonacci 61.8% one-day.

The buyers now target the next relevant upside target at $1940, where the SMA200 one-day lies.

Acceptance above the latter is needed to bolster the recovery momentum, as the $1850 hurdle will come into play. That level is the confluence of the previous high four-hour and Fibonacci 23.6% one-day.

Further up, the Fibonacci 38.2% one-month at $1857 could be tested.

Alternatively, a drop below the abovementioned key resistance now support at $1927 could trigger a quick drop towards $1815, the pivot point one-month S1.

The bears could then challenge the pivot point one-day S1 at $1811, which is the last resort for the 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.

Learn more about Technical Confluence

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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