Gold Price Analysis: XAU/USD holding onto critical $1871 level amid vaccine progress – Confluence Detector
Gold is consolidating Friday’s bounce from the long-held support at $1850, buoyed by a broadly weaker US dollar, courtesy of the covid vaccines-led optimism. Expectations of imminent vaccines weigh on the safe-haven dollar, offering some support to gold. Further, rekindling of the US fiscal stimulus hopes by the Treasury Secretary last Friday also helps the metal.
However, the risk-on rally in stocks likely caps the additional upside in XAU/USD while markets reassess the impact of the economic lockdowns heading into the Thanksgiving week.
How is gold positioned technically?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair is defending the powerful support at $1871, which is the convergence of the previous low on the four-hour, Fibonacci 38.2% one-week and Bollinger Band one-hour Middle.
A dense cluster of resistances are lined up around $1875, where the SMA10 one-day coincides with Fibonacci 23.6% one-day and previous high four-hour.
Further up, the next target awaits immediately at $1878, which is the Fibonacci 23.6% one-month.
Buyers will then aim for the confluence of the Fibonacci 61.8% one-week and Pivot Point one-day R1 at $1882.
However, the Pivot Point one-day R2 at $1891 remains the level to beat for the bulls.
To the downside, acceptance below the abovementioned $1871 support could open floors for a test of $1864. That level is the meeting point of the Fibonacci 23.6% one-week and Bollinger Band one-hour Lower.
The previous month low of $1860 will be next on the sellers’ radars.
A sharp drop towards the intersection of the previous week low and Pivot Point one-day S2 at $1852/50 cannot be ruled if the bears extend control below the $1860 level.
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.
