Gold Price Analysis: XAU/USD remains vulnerable amid covid vaccine hopes – Confluence Detector
Gold (XAU/USD) continues with its bearish consolidation following Monday’s 5% slump. The metal remains vulnerable amid seemingly no urgent need for a fiscal and monetary stimulus, as COVID-19 vaccine optimism raises expectations of a quicker economic rebound.
The metal could also take cues from the US macro news and sentiment on Wall Street, as full markets return this Thursday. The technical chart warrants caution, with the key levels found below.
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the recovery attempts in the bright metal remain capped below powerful resistance at $1875, which the convergence of the previous week low and Fibonacci 61.8% one-day.
Acceptance above that level could open doorways towards the next critical hurdle placed at $1890/91, the intersection of the Bollinger Band four-hour Middle and Fibonacci 38.2% one-month.
In between, the Fibonacci 23.6% one-month at $1877 could threaten the road to recovery.
Alternatively, a stack of minor support levels awaits around $1867 levels, the confluence of the SMA10 one-hour, Fibonacci 38.2% one-day and SMA5 four-hour.
A break below that level could expose the previous month low of $1860. Further south, the meeting point of the pivot point one-day S1 and Bollinger Band one-day Lower at $1851 is the next cap.
The fierce $1850 support of the pivot point one-month S1 is the level to beat for the XAU bears.
Here is how it looks on the tool
About 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.
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.
