Gold Price Analysis: XAU/USD recaptures $1900 on US stimulus hopes, eyes on $1928 cap – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) continues to benefit from the reduced haven demand for the US dollar, as investors cling onto the stimulus hopes after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin restarted the talks on a comprehensive package.

Robust Chinese Caixin Services PMI welcomed Beijing’s return after a week-long break and added to the risk-on mood, weighing further on the dollar. Looking ahead, the stimulus chatter will be closely followed, in absence of relevant US macro data.

How is gold positioned on the charts heading into the weekly close?

Gold: Key resistances and supports

The Technical Confluences Indicator shows that Gold is looking to extend the bullish momentum above the critical barrier at $1910, the previous low on one-hour.

Acceptance above the latter will expose the next upside target at $1918, which is the confluence of the previous week high and Bollinger Band four-hour Upper.

Further north, the focus remains on the next significant cap aligned at $1928, where the pivot point one-week R1 lies.

On the flip side, strong support awaits at $1904, the Fibonacci 38.2% one-month, a break below which could expose the $1900 support area.

Sellers would then target the critical cushion around $1895, the meeting point of a cluster of healthy support levels, including the Fibonacci 23.6% one-day, SMA50 four-hour and SMA200 one-hour.

The last line of support for the XAU bulls is seen at $1892, which is the convergence of Fibonacci 38.2% one-week, SMA50 one-hour and SMA10 four-hour.

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.

Learn more about Technical Confluence

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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