Gold Price Forecast: XAU/USD eyes $1730 and $1727 as next downside targets – Confluence Detector
- Gold price remains vulnerable as markets cheer Fed rate hike prospects.
- Treasury yields retreat but the upside momentum still remains intact.
- Gold remains vulnerable amid hawkish Fed outlook.
Gold is off the lows but remains vulnerable amid the underlying narrative the Fed could announce a sooner-than-expected rate hike, as the TIPS market has also started pricing in higher future inflation. The benchmark 10-year Treasury yields rallied to the highest levels in three-months at 1.55%, as Fed officials noted that they see tapering close. The US dollar has tagged higher alongside yields, exerting additional downward pressure on gold price.
Read: Gold Price Forecast: Focus remains on yields as XAU/USD eyes a pennant breakout
Gold Price: Key levels to watch
According to the Technical Confluences Detector, gold faced rejection at strong resistance around $1743, which is the confluence of the pivot point one-day S1 and Fibonacci 38.2% one-month.
If the abovementioned hurdle is cleared, then gold bulls will look to test the previous day low of $1745.
Further up, gold buyers will need a lot of conviction to take out a bunch of key resistance levels stacked up around $1750. At that level, the SMA10 four-hour, Fibonacci 38.2% one-day and Fibonacci 23.6% one-week coincide.
The next relevant upside target is seen at the Fibonacci 61.8% one-day at $1754.
On the flip side, immediate support awaits at $1734, the Bollinger Band one-day Lower.
If the selling pressure intensifies then a test of the pivot point one-week S1 at $1730 remains inevitable. Minor support at $1727, the pivot point one-day S3 will come into play.
Gold bulls will then look forward to temporary respite near $1724, where pivot point one-month S1 lies.
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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. If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.
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.
