Gold Price Analysis: XAU/USD path of least resistance is up, $1,837 eyed – Confluence Detector
- Gold has retreated after benefiting from the Fed's dovish message.
- The Confluence Detector is showing strong support.
- Gold achieves forecasted levels
Is inflation temporary or not? That is the question bedeviling gold traders – and also the Federal Reserve. XAU/USD received a boost after Fed Chair Jerome Powell dismissed the recent rise in prices as related to the reopening and pushed back against reducing its bond-buying scheme.
Without tapering, the bank creates $120 billion/month, and some of that money supports the precious metal. However, after surging in response to Powell's words, gold retreated from the highs. Now technicals may have their say.
What is next for XAU/USD?
The Technical Confluences Detector is showing that gold has strong support at $1,814, which is the convergence of the Bollinger Band 4h-Middle, the Fibonacci 38.2% one-month, the Fibonacci 61.8% and more. As the graphic below shows, it is the strongest line, and is below the current price, thus providing support.
An additional noteworthy cushion awaits at $1,811, which is the meeting point of the Fibonacci 23.6% one-week and the five-day Simple Moving Average.
Looking up, immediate resistance is at $1,827, which is a cluster of many lines, albeit medium-tier ones such as the BB 15min-Middle, the BB 1h-Middle, and more.
The upside target for XAU/USD is at $1,837, which is the confluence of the 50-day SMA and the Pivot Point one-week Resistance 2.
XAU/USD resistance and support levels
Confluence Detector
The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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.
Learn more about Technical Confluence