Gold Price Analysis: XAU/USD’s fate hinges on Wall Street sentiment, levels to watch – Confluence Detector

Dhwani Mehta FXStreet

Gold (XAU/USD) is back to square one this Friday after Thursday’s rollercoaster ride, thanks to Reddit’s day-trader-led silver market craze. Gold licks its wounds near $1850, as traders await fresh US stimulus updates amid risk-off market mood and broad-based US dollar strength.

The yellow metal is on track to book a monthly and weekly decline while holding onto the $1800 support. The sentiment on Wall Street and US economic data will emerge as the key catalysts. How is gold positioned on the technical graphs?

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold is flirting with $1845, which is the confluence of the previous high four-hour, Fibonacci 61.8% one-day and SMA5 four-hour.

The next upside target is aligned around $1849, the convergence of the SMA200 one-day, SMA10 one-day and Fibonacci 38.2% one-week.

Buyers could then challenge $1853, the intersection of the SMA50 four-hour and Fibonacci 38.2% one-day.

Powerful hurdle at $1857 (Fibonacci 23.6% one-day/ SMA50 one-day) will continue to offer strong resistance to the price.

Meanwhile, the downside remains exposed towards $1834, the previous day.

A break below the latter could put the Fibonacci 61.8% one-week at $1830 to test.

The Fibonacci 61.8% one-month at $1825 is the last line of defense for the XAU bulls.

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.

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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