Gold Price Analysis: XAU/USD bulls losing conviction below key $1761 hurdle– Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) is retreating from five-week highs, as the US dollar finds its feet amid a downbeat market mood. Growing concerns over the covid surge and vaccine side-effects dent the risk sentiment, lifting the haven demand for the greenback. Stronger US jobs data also continue to buoy the dollar.

Meanwhile, the US Treasury yields are stabilizing after a dovish blow from the FOMC minutes and Fed Chair Powell’s comments. Looking ahead the dynamics in the yields and dollar will continue to have a significant influence on gold prices.

Let’s take a look at how gold is positioned on the technical graphs.

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold is extending its retreat after facing rejection at the critical resistance at $1761, the confluence of the previous day high, Bollinger Band one-day Upper and the previous month high.

The XAU sellers then found acceptance below the $1754 support now resistance, where the SMA5 four-hour coincides with the Fibonacci 23.6% one-day.

The next relevant support awaits at $1750; the intersection of the Fibonacci 38.2% one-day and pivot point one-week R1.

Further down, the Fibonacci 61.8% one-day at $1743 could protect the XAU buyers, below which the pivot point one-day S1 and SMA5 one-day around $1739 will get tested.

The convergence of the previous day low and the previous week high at $1735 could challenge the bearish commitments.

Alternatively, the bulls need acceptance above the $1761 barrier to unleash further upside towards the Fibonacci 161.8% one-week at $1767.

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.

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.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

Gold remains below $4,100 despite receding Fed hike bets, weak USD

Gold opens with a bullish gap at the start of a new week amid receding Fed rate-hike expectations and a bearish US Dollar. Oil prices tumbled after Trump canceled an attack on Iran and said that a deal is near, easing inflation fears. This forces traders to dial back bets on extreme Fed tightening and drags the USD to a fresh low since June 17, which, in turn, is supporting the non-yielding bullion. However, the recent repeated failures to find acceptance above $4,100 warrant caution for XAU/USD bulls.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Middle East War updates: Trump holds off Iran strikes on pledge Hormuz deal is close

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week. Risk sentiment improves on Monday, undermining demand for the US Dollar Index and drag crude oil prices lower.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.