Gold (XAU/USD) looks to extend its recent bullish momentum starting out a fresh week amid hopes of additional fiscal stimulus under US President-elect Joe Biden. Biden is a presumptive victor, as the legal challenges by the Trump campaign remain.
Markets also cheer the prospects of continuity of the current policy environment even on a divided government, with Republicans taking hold of the Senate. The upbeat market mood continues to dimmish the US dollar’s attractiveness as a safe-haven. However, the gains in the global stocks and rising coronavirus cases could likely limit the upside in the metal. Let’s see how gold is positioned on the charts.
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the yellow metal remains on track to test the critical resistance at $1965, which is the pivot point one-month R2.
Ahead of that level, the confluence of the previous day high and Bollinger Band one-hour Upper at $1961 could challenge the bulls’ commitment.
Should the XAU bulls recapture the $1965 hurdle, the next upside target is seen at $1975, which is the intersection of the pivot point one-day S2 and Bollinger Band four-hour Upper.
Further up, $1980 is the level to beat for the bulls. That level is the Fibonacci 161.8% one-month.
Alternatively, a stack of healthy support levels is found $1953-51 levels, which could continue to guard the downside.
Acceptance below the SMA10 four-hour at $1950 is needed to fuel a corrective decline towards $1947, the convergence of the Fibonacci 61.8% one-day and Bollinger Band one-day Upper.
The next downside target is aligned at $1940, where the Fibonacci 23.6% one-week awaits.
The $1934 strong support, the previous month high, will be a tough nut to crack for the sellers.
Here is how it looks on the tool
About Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.