Gold Price Analysis: XAU/USD needs to crack $1,856 to unleash the upside – Confluence Detector

Gold has been edging higher amid growing hopes that Democrats and Republicans are nearing a stimulus bill. The latest reports suggest that the parties have set aside the most contentious topics and are ready to forge an accord worth some $900 billion. The funds would boost the precious metal.

The Federal Reserve is also in focus and any help would also send XAU/USD higher. How is it positioned on the technical charts? 

The Technical Confluences Indicator is showing that critical resistance awaits at $1,856, which is the convergence of the Fibonacci 38.2% one-week, the Simple Moving Average 5-1h, the Bollinger Band 15min-Middle and the previous daily high.

There are several additional caps on the way up, and a noteworthy upside target is $1,876, which is where the previous week's high and the Pivot Point one-day Resistance 2 meet up.

Some support awaits at $1,846, which is the confluence of several SMAs, including the 50-4h, the 200-1h, the 50-1h and more.

A considerable cushion awaits at $1,835, which is where the Fibonacci 61.8% one-day and the PP one-day Say Support 1 converge. 

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