Gold Price Analysis: XAU/USD’s path of least resistance is down as King dollar rules – Confluence Detector


Gold (XAU/USD) is set to book the first weekly decline in three weeks, as the US dollar holds firmer near multi-month highs amid economic optimism. Recent series of upbeat US macro data combined with faster vaccine rollouts bolster expectations of quick economic recovery.

Higher Treasury yields amid hopes of additional US stimulus also offer support to the greenback, which weighs on the non-yielding gold. Looking ahead, gold traders gear up for another data-heavy US docket.

Let’s take a look at the key technical levels for trading gold ahead?

Gold Price Chart: Key resistance and support levels

The Technical Confluences Detector shows that gold wavers near-daily lows, looking to attack the critical support at $1717, the confluence of the previous week and month lows.

The next downside target awaits at $1703, the pivot point one-week S2, below which the Fibonacci 161.8% one-week could be tested.

Further south, the sellers will aim for a $1692 cap, the intersection of the pivot point one-day S3 and Bollinger Band one-day lower.

The XAU bulls are likely to face an uphill battle, with a dense cluster of healthy resistance levels stacked up around $1730-35 region. That confluence zone comprises of SMA10 one-day, Fibonacci 61.8% one-week and SMA200 one-hour.

The convergence of the previous day high and Fibonacci 38.2% one-week at $1745 will be a tough nut to crack for the XAG bulls.

Powerful resistance at $1756, the meeting point of the previous week high and SMA200 four-hour, could the next relevant upside target.

Here is how it looks on the tool

fxsoriginal

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.

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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