Gold (XAU/USD) has cleared the $1900 level on Monday, surging 1% to reach over one-week highs. The extension to the last week’s rally comes on the back of a much-awaited US fiscal stimulus deal. US Congress reached an agreement on a $900 billion COVID-19 relief aid package on Sunday, with votes likely on Monday.
Gold also benefited from the coronavirus-induced fresh lockdowns imposed globally, defying the strengthening haven demand for the US dollar. Heading into the holiday-shortened Christmas week, let's see how is gold positioned on the charts.
Gold Price Chart: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair has finally taken out the key $1900 level, which was the confluence of the Pivot Point one-day R3 and Bollinger Band four-hour Upper.
The buyers now target the $1907 barrier, where the SMA100 one-day coincides with the Pivot Point one-month R1.
The next resistance awaits at the Pivot Point one-week R1 of $1912. Acceptance above the latter could open doorways to heaven.
On the flip side, a breach of the $1900 support could put the $1896 cushion at risk. That level is the previous week high.
Minor support is seen at $1892, which is the convergence of the Bollinger Band one-day Upper and 15-minutes Lower.
Bears will then eye a sustained move below $1888, the intersection of the Fibonacci 61.8% one-month and Pivot Point one-day R1, to accelerate the downward pressure.
Further south, the next relevant support is aligned at $1883, which is the Fibonacci 38.2% one-day.
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.
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