Gold Price Analysis: XAU/USD faces wall of resistance. bears eye $1,766 – Confluence Detector
- XAU/USD has been under growing pressure as US yields advanced.
- The Confluence Detector is showing gold faces substantial resistance.
- Gold Price Forecast: Bullish flag breakout in play for XAU/USD
How close is the Federal Reserve to tapering? According to bond markets, the bank is on course to withdrawing support, and for yieldless gold, any increase in returns on Uncle Sam's debt is bad news. The fate of the bank's $120 billion/month bond-buying scheme is fascinating markets ahead of Fed Chair Jerome Powell's all-important Jackson Hole speech.
His colleagues James Bullard and Esther George have called for printing fewer dollars. The recent moderation in US COVID-19 cases – states that suffered first are seeing infections fall – is also contributing to the notion that less monetary support is needed.
How is the precious metal positioned on the charts?
The Technical Confluences Detector is showing that XAU/USD faces significant resistance at $1,789, which is the convergence of the Simple Moving Average 100-15m, the SMA 50-4h and the Fibonacci 23.6% one-week.
An even more considerable cap awaits at $1,792, which is where the Fibonacci 61.8% one-month and the 5-day SMA meet up.
Some support is at $1,785, which is the confluence of the 10-day SMA, the Bollinger Band one-day Middle, the SMA 5-15m, and the Fibonacci 38.2% one-week.
Another cushion awaits at $1,775, which is where the Pivot Point one-month Support 1 hits the price.
Further down, bears may aspire to reach $1,766, which was last month's low point.
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.
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