Gold (XAU / USD) tested the critical resistance of $ 1976 while approaching two-week highs on Monday. The Fed’s dovish rhetoric, which implied that a period of low interest rates would be prolonged, continues to benefit unproductive gold.
Even though a rebound in US Treasury yields and a risky mood in the market could make it difficult for the bulls to extend the advance towards the $ 2,000 mark. Investors also remain wary of the all-important US NFP report due later this week. In the meantime, let’s see how gold is technically positioned?
Gold: resistance and key supports
The tool shows that gold has tested the critical barrier of $ 1976, which is the convergence of the previous week’s high, the previous four-hour high, and the four-hour Bollinger Band.
Acceptance above the latter will open the doors to the previous month’s high of $ 1985.
The next high is seen at $ 1992, the one-week R1 pivot point, as the bulls keep the $ 2000 level on their radars.
On the downside, minor support is expected at $ 1966, the convergence of the four hour SMA5 and the 15 minute SMA50.
The immediate cushion is then seen at $ 1962, where the 23.6% Fibonacci one day and the one hour Bollinger Band intersect.
The one-week 23.6% Fibonacci support at $ 1959 may provide some support for the bulls. A sharp decline towards the robust support of $ 1950 (38.2% Fibonacci on a week) if the above barrier does not hold.
This is what it looks like on the tool
About the confluence detector
The TCI (Technical Confluences Indicator) is a tool for locating and reporting price levels where there are congestion or indicators, moving averages, Fibonacci levels, pivot points, etc. Knowing where these congestion points are is very useful for the trader and can be used as the basis for different strategies.
Learn more about Technical Confluence