Gold Price Analysis: XAU/USD eyes $1716 downside target ahead of US CPI – Confluence Detector


Gold (XAU/USD) has reversed the early bounce and resumes the two-day decline, as Treasury yields regain upside momentum amid rising inflation expectations. The renewed uptick in the yields strengthened the recovery in the US dollar, as all eyes remain on the critical US CPI release for March.

Gold’s fate will hinge on the US inflation numbers, as it will offer fresh insights on the strength of the economic recovery and the Fed’s monetary policy outlook.

Meanwhile, let’s take a look at the key technical levels for trading gold.

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold has breached the key support around $1730, the confluence of the previous day low, Fibonacci 61.8% one-month and SMA200 four-hour.

The next relevant support is seen at $1725, where the pivot point one-week S1 lies.

The previous week low at $1721 could offer additional comfort to the XAU bulls. A firm break below the last could trigger a sharp drop toward the pivot point one-day S2 at $1716.

Alternatively, recapturing the abovementioned $1730 hurdle is critical to reviving the upside momentum.

The XAU bulls will then need to battle out a dense cluster of resistance levels around $1735, where the Fibonacci 61.8% one-week coincides with the Fibonacci 38.2% one-day and SMA5 four-hour.

Further north, the intersection of the SMA100 one-hour and SMA5 one-day at $1742 will offer stiff resistance.

The previous day high at $1745 is likely to be a tough nut to crack for the XAU buyers.

Here is how it looks on the tool

fxsorignal

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.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

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