Gold Price Analysis: XAU/USD needs to overcome $1,956 to unleash the upside – Confluence Detector

Yohay Elam FXStreet

Gold has kicked off the new week by a minor rise from the lows, yet it shows some hesitance. The main downward driver for XAU/USD in the previous week was the Federal Reserve's relative hawkishness. The world's most powerful central bank seemed reluctant to introduce more stimulus. Less money printing means diminished support for the precious metal.

However, Jerome Powell, Chairman of the Federal Reserve, is set to speak on Thursday and is set to lay out an updated view on the economy. Moreover, he may change his mind and clarify that the bank is ready to do more – including capping bond yields. Lower returns on US debt mean the yellow metal is more attractive.

How is XAU/USD positioned on the charts?

The Technical Confluences Indicator is showing that gold is facing critical resistance at $1,956, which is the convergence of the Simple Moving Average 10-one-day and the previous daily high.

Further up, a soft cap awaits at $1,961, which is the meeting point of the SMA 5-one-day and the Pivot Point one-day Resistance 1.

Support awaits at $1,939, which is a dense cluster including the SMA 5-4h, the BB 1h-Middle, the SMA 50-15m, the SMA 10-4h, and the Fibonacci 61.8% one-day.

Further down, the next cushion is at $1,932, which is the confluence of the Fibonacci 23.6% one-month and the previous 4h-low.

Key XAU/USD resistances and supports

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.

Learn more about Technical Confluence

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.

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