Gold Price Analysis: XAU/USD bulls return ahead of a big week, levels to watch – Confluence Detector

Dhwani Mehta FXStreet

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.

Learn more about Technical Confluence

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.

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