Gold (XAU/USD) trades on the defensive around $1850 amid a broadly firmer US dollar and hopes of President Joe Biden’s $1.9 trillion stimulus breakthrough in Congress. Dovish Fed expectations appear to cap the downside in the metal.
Investors, however, remain cautious amid encouraging vaccine news from the US and IMF’s upgrade to the 2021 global growth forecasts. How is gold positioned on the charts ahead of the all-important Fed decision?
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that gold is heading towards the $1851 resistance zone, which is the confluence of the SMA5 four-hour and SMA200 one-hour.
The Fibonacci 38.2% one-day at $1855 could threaten the XAU bulls. The next critical barrier at $1857/58 needs to be cleared on a sustained basis for the metal to negate the near-term bearish momentum.
The buyers will then target $1862 for the further upside. That level is the previous day high.
To the downside, immediate support is seen at the previous low four-hour at $1845, below which the pivot point one-day S2 will be challenged.
The next on the sellers’ radars remain the $1833, the pivot point one-day S3. Further south, the Fibonacci 61.8% one-week at $1831 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.
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