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

Dhwani Mehta FXStreet

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.

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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