Gold Price Analysis: Break above resistance at $1,900 opens door to new levels – Confluence Detector
Gold licks wounds after the extension of Tuesday’s slide to three-week lows, as the bears take a breather in the run-up to the US CPI release. Broad US dollar strength remains in vogue amid the downbeat market mood, as concerns over coronavirus and US-China conflict linger.
Update: XAU/USD has been extending its recovery and seems to have found its feet at around $1,930 as of Thursday. US bond yields have stabilized after a debt issuance by the US government, helping the precious metal find a new balance. After overcoming $1,900, there are new levels to watch. See Have gold prices reached their peak? [Video]
The yellow metal lost nearly 6% on Tuesday, booking the biggest drop in seven years while on track for a 7.5% weekly loss. The rebound in the US Treasury yields lifted the greenback and downed the metal. How is gold positioned on charts ahead of the US CPI?
XAU/USD: Key resistances and supports
The tool shows that the bounce in the bright metal will likely be capped at the powerful resistance at $1900, which the Fibonacci 38.2% one-month.
Acceptance above the latter will open doors towards $1906.50, which also appears to be a tough nut to crack for the XAU bulls.
Meanwhile, the immediate upside remains limited by the Fibonacci 61.8% one-week at $1890.
The path of least resistance remains to the downside amid a lack of healthy support levels. The immediate target for the sellers is seen around $1875/72, the confluence of the three-week lows and SMA200 4H.
The critical support awaits at $1865, the pivot point one-day S1. A break below which trigger a fresh sell-off towards $1850.
Here is how it looks on the tool
About the 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.
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.
