Gold Price Analysis: XAU/USD eyes $1939 upside barrier amid US stimulus hopes – Confluence Detector


Gold (XAU/USD) buyers are finally extending their control above $1900, rejoicing the renewed optimism over the US fiscal stimulus. The safe-haven US dollar wilts amid a risk-on market mood after US House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin moved closer to an agreement on a fresh coronavirus relief package late Tuesday.

Markets remain hopeful that the stimulus deal will be clinched ahead of the November election and the new funds will boost the demand for gold as an inflation hedge. The stimulus talks are likely to continue this Wednesday. Let’s take a look at how gold is positioned on the charts.

Gold: Key resistances and supports

The Technical Confluences Indicator shows that the yellow metal has recaptured critical resistances and now looks to take on the next minor cap at $1925, which is the confluence of the pivot point one-day R2 and SMA50 one-day.

Further north, the bulls will test a soft upside barrier at $1929 (pivot point one-week R1), opening doors for a test of the critical resistance at $1939, the Fibonacci 61.8% one-month.

To the downside, $1915 is strong support, which the convergence of the previous day high and Fibonacci 61.8% one-week.

A break below the last support, the SMA50 on four-hour at $1909 could offer some reprieve to the bulls.

Acceptance below the latter could challenge the bears’ commitment at $1905, the meeting point of the Fibonacci 38.2% one-month, SMA5 one-day and previous low on four-hour.  

Here is how it looks on the tool

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About Confluence Detector

The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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

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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