Gold Price Analysis: XAU/USD needs to crack $1850 to conquer key $1864 level – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) sees bargain hunters jumping in, as the attempts to recapture $1850 continues this Wednesday. The revival of the reflation trades amid US stimulus optimism continues to push riskier assets higher at the US dollar’s expense, keeping the inflation-hedge gold underpinned.

Looking ahead, the metal will take cues from the broader market sentiment, positioning and incoming stimulus updates. How is gold positioned on the technical graphs?

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold has recaptured the critical resistance at $1842, which is the confluence of the previous high four-hour, Fibonacci 61.8% one-week and Fibonacci 23.6% one-month.

Bulls would then extend their control to crack $1864, the meeting point of the Fibonacci 38.2% one-month and the SMA200 four-hour.

On its way north, the bulls are likely to face a bumpy road amid a dense cluster of resistance levels aligned around $1858/60 levels, the intersection of the SMA50 one-day and pivot point one-day R2.

The confluence of the SMA100 one-day and previous week high at $1872 could be the next upside target.

On the flip side, immediate support is seen at $1841, which is the convergence of the previous high four-hour and Fibonacci 23.6% one-month.

The next relevant cushion awaits at $1831, where the SMA50 one-hour coincides with the SMA50 four-hour.

Further south, the $1819 level could challenge the bears’ commitment. That level is the confluence of the Fibonacci 38.2% one-week and pivot point one-day S2.

The previous month low at $1803 could be the next downside target for the XAU sellers.

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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