Gold Price Analysis: XAU/USD’s key levels to watch ahead of US CPI, stimulus vote – Confluence Detector

Gold (XAU/USD) bulls take a breather after the 2% recovery rally witnessed on Tuesday. The haven demand for the US dollar has returned amid a cautious market mood, as investors await the House of Representatives vote on the Senate’s $1.9 trillion stimulus bill this Wednesday.

The US Treasury yields keep its pullback from 13-month highs intact, underpinning the sentiment around the non-yielding gold. Ahead of the stimulus vote, the US CPI data will hog the limelight and have a significant impact on gold.  

Let’s take a look at the key technical levels for trading gold in the day ahead.

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold needs to clear powerful resistance around $1717/ $1720 to unleash additional recovery gains.

The level is the intersection of the previous month low, previous high four-hour and SMA50 four-hour.

Further up, the SMA10 one-day at $1725 would probe the buyers. The next resistance awaits at $1732; the convergence of the Fibonacci 61.8% one-week and pivot point one-day R1.

The pivot point one-week R1 at $1743 will be the next upside target for the XAU bulls.

Alternatively, strong support is aligned at $1705, which is the confluence of the Fibonacci 38.2% one-day, Fibonacci 23.6% one-week and SMA100 15-minutes.

The previous week low at $1687 will be back on the sellers’ radars.

The previous day low at $1680 could come to the bull’s rescue, below which the pivot point one-month S1 at $1673 would offer the last line of defense.

Here is how it looks on the tool

About Technical Confluences Detector

The TCD (Technical Confluences Detector) 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.