Gold Price Analysis: Recapturing $1754 barrier is critical for XAU/USD, Powell eyed – Confluence Detector

Gold (XAU/USD) is edging lower from near the $1750 supply zone, although holds most of Tuesday’s gains induced by broad-based US dollar sell-off. The greenback wallows in three-week lows against its main competitors, weighed down by the decline in Treasury yields after stronger US CPI. Solid US 30-year bond auction also collaborated with the weakness in the yields, booting the non-yielding gold.  

The next direction in gold could likely be determined by Fed Chair Powell’s speech after stronger Inflation failed to spark fears over Fed’s tapering. Meanwhile, let’s take a look at the key technical levels for trading gold.

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold faces strong resistance just near $1750, the confluence of the previous day high and Fibonacci 23.6% one-week.

The XAU bulls need to recapture the critical resistance at $1754 to unleash additional upside. That level is the convergence of the SMA50 one-day and pivot point one-month R1.

The next bullish target is aligned at the previous month high of $1761.

To the downside, the Fibonacci 38.2% one-day level at $1740 could offer immediate support, below which the Fibonacci 61.8% one-week at $1735 could be challenged.

Further south, the intersection of the SMA10 one-day and pivot point one-day S1 around $1730 could be the last line of defense for the XAU bulls before the price tests six-day lows of $1724.

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.