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.

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