Gold (XAU/USD) broke the consolidative mode to the upside, starting out a big week on the front foot. Fresh Iran-US geopolitical concerns outweighed the vaccine hopes and lifted the yellow metal.
Politico reported that Iran is reportedly plotting to kill a US ambassador, response to the killing of Qassim Soleimani. Meanwhile, AstraZeneca coronavirus vaccine clinical trials will resume in the UK after a week’s pause due to safety concerns.
Gold bulls fight back control ahead of a big week, with the FOMC decision to steal the show. How is gold positioned ahead of the key event risks this week?
Gold: Key resistances and supports
The Technical Confluence tool shows that gold has recaptured the critical barrier at $1945, which is the convergence of the Fibonacci 38.2% one-day, one-week and one-month.
Amid a lack of healthy resistance levels, it appears to be a smooth ride higher for the bulls.
The next soft cap is aligned at $1951.50, the Fibonacci 23.6% one-week. Further north, the pivot point one-day R2 at $1961 could be tested en route the previous week high at $1966.50.
The tough hurdle at $1969 will then come into play. That level is the pivot point one-day R3.
On the flip side, should the bulls surrender the aforesaid critical resistance now support at $1945, sellers could call for a test of the next significant cushion at $1938.50 (SMA50 four-hour).
The Fibonacci 61.8% one-week support of $1930 will be put to test if the bears take over.
$1927 will be the last resort for the bulls, which is the confluence of pivot point one-day R2 and Bollinger Band four-hour Lower.
Here is how it looks on the tool
About the 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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