Gold Price Analysis: XAU/USD needs to crack $1757 for further recovery – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) has kicked-off March on a positive footing, looking to recapture the $1750 level. Gold attempts recovery from eight-month lows of $1717, having booked the biggest monthly slump since late 2016 amid the rout in the global bonds. The bond tumbled amid a wild week and on rising inflation expectations, sending the returns on the markets through the roof. The non-yielding gold suffered the most.

The sentiment around the yellow metals is also underpinned by the passage of the US $1.9 trillion stimulus by the House of Representatives. In the week ahead, the focus will continue to remain on the yields, especially the US Treasury yields, and the all-important payrolls release.

Let’s take a look at how gold is positioned on the technical charts?

Gold Price Chart: Key levels of note

The Technical Confluences Indicator shows that gold’s recovery is likely to run into immediate resistance at $1753, the confluence of the Fibonacci 61.8% one-day, SMA10 four-hour and SMA100 15-minutes.

A break above which could challenge a powerful barrier at $1757, where the Fibonacci 23.6% one-month coincides with the Fibonacci 38.2% one-week.

The buyers would then target the pivot point one-day R1 at $1766 en-route the $1773 hurdle.

The intersection of the previous day high and Fibonacci 38.2% one-month at $1776 is the level to beat for the XAU bulls.

To the downside, an immediate cushion awaits at $1746, the Bollinger Band one-day Lower.

The sellers need to crack the $1740 cap in order to resume the recent downtrend. That level is the confluence of the Fibonacci 38.2% one-day, previous high four-hour and Fibonacci 23.6% one-week.

A sharp drop towards the multi-month lows of $1717 cannot be ruled if the bulls fail to defend the critical $1740 support.

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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