Gold Price Analysis: XAU/USD bounces at critical support, bulls eye $1,803 – Confluence Detector

Yohay Elam FXStreet

Gold has suffered a fresh blow from US Retail Sales – Americans expanded their expenditure by no less than 5.3% in January, far above expectations. The robust data has triggered yet another sell-off in bonds, sending yields to above 1.3%. Contrary to Treasuries, the precious metal does not provide any returns and is thus less attractive.

In the meantime, President Joe Biden continues pushing his massive $1.9 trillion coronavirus relief bill. Will it push yields even higher or will the cash flow into gold?

In the meantime, here is how XAU/USD is positioned on the charts.

The Technical Confluences Indicator is showing that gold has critical support at $1,781, which is the convergence of the Simple Moving Average 5-15m, the Pivot Point one-week Support 2, the PP one-day S1 and more.

It is closely backed up by $1,777, which is where the Bollinger Band 15min-Lower and the PP one-month S1 meet up.

Looking up, resistance awaits at $1,803, which is the confluence of the previous monthly low and the Fibonacci 38.2% one-day.

The upside target if things substantially turn around, is at $1,825, where the Fibonacci 61.8% one-week, the previous daily high and the SMA 50-4h all hit the price.

XAU/USD resistance and support levels

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.

Learn more about Technical Confluence

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

AUD/USD defies gravity; focus is back to 0.7000

AUD/USD has maintained its bid bias around 0.6970 ahead of the opening bell in Asia on Tuesday. The pair has added to Friday’s rebound, retargeting the 0.7000 hurdle despite another day of firm gains in the Greenback. Looking ahead, Westpac will publish its Consumer Confidence gauge on the domestic calendar.

USD/JPY retakes 158.00 amid hawkish BoJ bets, firmer USD

USD/JPY erases losses and retakes 158.00 in the Asian session on Monday, trading within a one-week-old range. Geopolitical uncertainty continues to underpin the US Dollar, despite fading Fed rate hike hopes, supporting the pair's rebound. However, further upside could be capped by hawkish BoJ expectations and looming intervention risks that could support the Japanese Yen.

Gold treads water around $4,150

Gold now regains some composure and approaches the $4,150 mark per troy ounce late on Monday. The precious metal’s vacillating price action comes in response to the persistent advance in the US Dollar in combination with the resurgence of the upside momentum in US Treasury yields across the curve.

Bitcoin and Gold Outlook: BTC slips, XAU downtrend persists as US Services PMI misses forecasts

Bitcoin (BTC) faces growing headwinds on Monday, as it trades lower below $86,000. Despite the ongoing pullback, the Crypto King remains in a broad range with the lower limit near $84,000 and the upper limit at $88,000. A break on either side of this zone would influence BTC's direction. Gold (XAU/USD), meanwhile, retains a dominant bearish outlook as price action continues downward toward $4,100.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.