Gold Price Analysis: XAU/USD’s acceptance above $1815 strong cap is critical for further recovery – Confluence Detector


Gold (XAU/USD) is reversing a part of Tuesday’s 2% recovery rally from five-month lows, as the coronavirus vaccine optimism supersedes the renewed hopes for additional US stimulus.  Markets remain wary about a stimulus deal despite the Bipartisan Congress’s $908 billion aid proposal.

The vaccine rollout is imminent this month on both sides of the Atlantic, which could likely keep gold’s recovery in check. Meanwhile, US fiscal stimulus hopes and negative real yields could cushion the downside. The focus shifts on the US economic data and stimulus updates for fresh trading impetus.

Gold: Key levels to watch

The Technical Confluences Indicator shows that the XAU/USD pair faces powerful resistance around $1813/1815 levels, which is the convergence of the Fibonacci 23.6% one-month, SMA10 one-hour and Fibonacci 38.2% one-week.

Recapturing the latter is critical to reviving the recovery momentum from the multi-month trough. The next crucial hurdle is seen at $1818, where the previous day high coincides with the SMA50 four-hour.

The bulls could then aim for the $1825 resistance, which is the SMA10 one-day. Further north, the Pivot Point one-day R1 at $1829.

Alternatively, immediate support awaits at $1807, which the Fibonacci 23.6% one-day, below which a dense cluster of supports is aligned around $1803. At that level, the Fibonacci 38.2% one-day and SMA200 one-day intersect.

The next fierce support is seen at $1800, which is the confluence of the SMA5 one-day and Fibonacci 23.6% one-week.

A breach of the last could trigger a fresh sell-off towards $1791, the meeting point of the Fibonacci 61.8% one-day and SMA50 one-hour.

Here is how it looks on the tool

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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

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

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