Gold Price Analysis: XAU/USD path of least resistance is up after whipsaw – Confluence Detector

Gold has recovered from its lows as the market mood improved.
The Confluence Detector is showing that XAU/USD's path of least resistance is up.
Gold Price Analysis: XAU/USD rallies back closer to multi-month tops, around $1,840 region

Yohay Elam FXStreet

Inflation fears are rising – as seen in both the Consumer Price Index figures and the University of Michigan's Consumer Sentiment data. Is gold still a hedge against rising prices? That remains debatable, but the increase in the precious metal's value is clear. It is more related to the Federal Reserve's insistence that any such move is transitory.

Where next for gold price from here?

The Technical Confluences Detector is showing that XAU/USD has some support at $1,829, which is the convergence of the Simple Moving Average 5-4h, the previous daily high, the Bollinger Band one-hour Middle, the 5-day SMA and more.

The gold price has an even more significant cushion at $1,814, which is the meeting point of the Pivot Point one-day Support 1 and the Fibonacci 38.2% one week.

Looking up, some resistance awaits at $1,841, which is the confluence of the BB one-day Upper, the PP one-day Resistance 2 and more.

Another minor cap is at $1,850, which is where the PP one-month R2 hits the gold price.

All in all, XAU/USD has strong support and weak resistance, pointing to further gains.

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.

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.

EUR/USD remains sidelined around 1.1600

EUR/USD clings to its decent gains on Monday and continues to move in a consolidative mood around the 1.1600 region. Improved risk appetite following the US-Iran agreement to reopen the Strait of Hormuz continues to weigh on the US Dollar, lending support to the risk complex. Looking ahead, investors are likely to remain on the sidelines ahead of Wednesday's FOMC meeting.

GBP/USD retreats from tops, back to 1.3420

GBP/USD keeps its advance past the 1.3400 yardstick at the beginning of the week. In the meantime, Cable continues to draw support from improved market sentiment following reports that the US and Iran have reached a framework agreement aimed at ending the conflict and reopening the Strait of Hormuz.

Gold stays firm, still below $4,400

Gold builds on its recent gains on Monday, climbing well north of the $4,300 mark per troy ounce. The yellow metal benefits from renewed selling pressure on the Greenback as investors reassess the implications of the US-Iran agreement to end hostilities and reopen the Strait of Hormuz. Market participants now turn their attention to Wednesday's FOMC gathering.