Gold Price Analysis: XAU/USD remains trapped between two key barriers, awaits Powell – Confluence Detector

Gold’s (XAU/USD) recovery from seven-month troughs remain contained, thanks to the surge in the US Treasury yields across the curve, as reflation trades dominate amid covid vaccine and stimulus-driven optimism. The benchmark 10-year US treasury yields rose almost 4 basis points to refresh yearly tops of 1.3822%.

Heading into the new week, the risks remain skewed to the downside for gold, as attention turns towards the Fed Chair Jerome Powell’s testimonies for the next direction in the metal.

How is positioned on the technical graphs ahead of the key event risk?

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold is holding the lower, looking to challenge powerful support at $1779, the confluence of the Fibonacci 23.6% one-week and SMA10 four-hour.

A breach of the last could expose the Fibonacci 61.8% one-day at $1775. The bears will then target the pivot point one-day S1 at $1767.

The last line of defense for the XAU bulls is aligned at $1753, the pivot point one-week S1.

On the flip side, the buyers need to find a firm foothold above $1790, the confluence of the previous four-hour, SMA100 one-hour and SMA5 one-day, in order to revive the recovery momentum.

The next relevant upside barrier is seen at $1803/04, the intersection of the previous month low and Fibonacci 61.8% one-week.

If the metal tops the latter on a sustained basis, the $1808 hurdle would be put to test. That level is the meeting point of the SMA200 one-hour and SMA10 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.