Gold Price Analysis: XAU/USD needs to break above $1,771 to extend rally – Confluence Detector
- Gold has surged in tandem with the dollar's broad retreat.
- The Confluence Detector is showing XAU/USD faces resistance at $1,771.
- Gold is not a dream risk-off hedge, nor is Bitcoin [Video]
Stocks go up, stocks go down – and gold remains highly correlated to the fluctuations in the dollar. The broad market mood has worsened amid fears of Sino-American trade tensions, supply issues and soaring energy prices. However, the precious metal seems to have lost its correlation with the risk-on/risk-off flows.
How is XAU/USD positioned after this turbulence?
The Technical Confluences Detector is showing that gold's next barrier is $1,771, which is where the Bollinger Band one-day Middle and the Pivot Point one-day Resistance 2 converge.
Above $1,771, which is a significant resistance line, the next soft cap to watch is $1,776, which is where the PP one-week R1 and the BB 4h-Upper meet up.
Some support awaits at $1,765, which is the confluence of the Fibonacci 38.2% one month and the previous day's high.
Further down, a considerable cushion awaits at $1,748, which is a juncture including the Fibonacci 38.2% one-week, the Fibonacci 23.6% one-month, and the BB 1h-Lower.
XAU/USD resistance and support levels
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.
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
