Gold price (XAU/USD) drops back towards the recently flashed 2-year low near $1,626 as sour sentiment joined hawkish Fedspeak to propel the US Dollar Index. While Russia-linked geopolitical worries are the headline challenge to the market, the recent plunge in the many currencies compared to the US dollar, mostly the British Pound (GBP), also adds to the risk-off mood.
Additionally, stronger US PMIs and hawkish Fedspeak are the extra catalysts that favor the US dollar bulls and weigh on the bullion prices lately. Nonetheless, this week’s speech from Fed Chairman Jerome Powell will be important for clear directions as traders sense some pullback in the greenback.
Gold Price Key Level Analysis
The Technical Confluence Detector indicates that the gold price remains comfortably below the $1,645 support-turned-resistance confluence consisting of the middle band of the hourly Bollinger and the pivot point one month S2.
With that in mind, the previous day’s low and the SMA10 on 1H guards the quote’s immediate upside near the $1,640 mark. It should also be noted that many hurdles beyond $1,645 could challenge the XAU/USD bulls. Among them, a convergence of the Fibonacci 38.2%
It should be noted that many hurdles beyond $1,645 could challenge the XAU/USD bulls. Among them, a convergence of the Fibonacci 38.2% on one-day and SMA10 on 4H offers a strong resistance near $1,655. On the contrary, the pivot point one-day S1 joins the lower band of the hourly Bollinger to highlight $1,631 as the immediate support.
Following this, the previous low 4H joins the pivot point one week S1 featuring $1,627 as the key support. In general, gold is likely to remain weak unless staying successfully beyond $1,645.
Technical Confluences Detector Overview
The TCD (Technical Confluences Detector) is a tool used to locate and point out these price levels where there is a congestion of indicators, moving averages, pivot points, Fibonacci levels, and many others. In case you are a short-term trader, you will get entry points for counter-trend strategies and hunt a few points at a time.
If you are a medium-to-long-term trader, the tool will enable you to know in advance the price levels where a medium-to-long-term trend might stop and rest, where to unwind positions, or where to increase your position size.
