Gold Price Analysis: XAU/USD eyes $1864 upside target amid US stimulus hopes – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) extends a three-day winning streak on Tuesday, looking to regain the $1850 level. The road to recovery from two-month troughs picks up pace amid an imminent approval of the US $1.9 trillion stimulus package by Congress. Growing optimism on the stimulus is pushing the US inflation expectations, underpinning the inflation-hedge gold.

However, rising longer-term inflation expectations also drive the Treasury yields higher, posing a risk to the rally in gold. Let’s take a look at how is gold positioned technically.

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold is looking to find acceptance above the critical resistance at $1844, which is the confluence of the previous high four-hour, SMA100 four-hour and Fibonacci 23.6% one-month.

The next significant target for the bulls awaits at $1864, where the Fibonacci 38.2% one-month coincides with the SMA200 four-hour.

Ahead of that level, a bunch of minor resistance levels are stacked up around $1860, which is the intersection of the SMA50 one-day and pivot point one-week R1.

Meanwhile, immediate support is seen at $1837, the convergence of the Fibonacci 61.8% one-week, SMA5 one-hour and previous day high.

The next cushion is aligned at $1834, where the SMA200 one-hour and SMA10 one-day intersect.

The SMA10 four-hour support at $1826 could come into play, below which the sellers would aim for $1818, the meeting point of the SMA50 one-hour and Fibonacci 38.2% one-week.

Powerful support at $1808 (previous day low) is the level to beat for the XAU bears.

Here is how it looks on the tool

About 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.

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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