Gold Price Analysis: Key levels to watch as XAU/USD sees a dead cat bounce – Confluence Detector

Gold (XAU/USD) is attempting a minor bounce from six-week lows of $1817. However, the further upside appears elusive as the Treasury yields continue its surge on US stimulus hopes and drive the US dollar higher.

Investors remain hopeful that US President-elect Joe Biden will announce a bigger fiscal stimulus package when he makes an important economic speech on Thursday.

How is gold positioned on the charts heading into a new week?

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold has recaptured strong resistance at $1927, which is the Fibonacci 61.8% one-day.

The buyers now target the next relevant upside target at $1940, where the SMA200 one-day lies.

Acceptance above the latter is needed to bolster the recovery momentum, as the $1850 hurdle will come into play. That level is the confluence of the previous high four-hour and Fibonacci 23.6% one-day.

Further up, the Fibonacci 38.2% one-month at $1857 could be tested.

Alternatively, a drop below the abovementioned key resistance now support at $1927 could trigger a quick drop towards $1815, the pivot point one-month S1.

The bears could then challenge the pivot point one-day S1 at $1811, which is the last resort for the bulls.

Here is how it looks on the tool

About Confluence Detector

The TCI (Technical Confluences Indicator) 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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