XAU/USD bears need to break $1,850 to trigger further decline – Confluence Detector
- The price of gold tries a rebound on Tuesday but is not out of the woods yet.
- Pullback in US Treasury yields, dollar offers reprieve for gold bulls.
- Attention turns to US inflation data as growth and inflation fears loom.
The price of gold is attempting a minor bounce in Tuesday’s trading so far, though bulls seem less convinced as global economic growth and inflation concerns continue to haunt markets. The market’s cautious tone will keep the dollar safe even if Treasury yields engage in a corrective decline. The price of gold fell to a multi-day low of $1,852 on Monday as sell-all mode engulfed markets on fears for growth, triggered by rising interest rates from the Fed, China’s covid restrictions and the spike in inflation caused by the Ukraine crisis.
Read also: Gold Price Prediction: The Unbeatable Dollar Should Continue to Appreciate
Gold price: Main levels to watch
The Technical Confluence Detector shows that the gold price rebound is poised to challenge a bunch of healthy resistance levels around $1,865 which is the 38.2% Fibonacci convergence on a day and of Fibonacci 23.6% over one week.
Next, gold bulls will need to find a strong position above the powerful resistance at $1,974 to extend the rally momentum. This level is the confluence of the SMA5 on a day, Fibonacci 61.8% on a day and Fibonacci 38.2% on a week.
The next relevant upside barrier is at the 1-day R1 pivot point at $1,877, above which the 1-day SMA10 at $1,882 will be the level to beat for XAUUSD buyers.
Alternatively, strong support awaits around the $1,855 region, the S1 week pivot point.
If the selling pressure intensifies, then the confluence of the previous week’s low and the previous day’s low of $1,852 will come into play.
Further down, the psychological level of $1,850 will be tested, below which gold bulls will look for immediate support at the S1 1-month pivot point of $1,847.
The last line of defense for gold bulls is set at $1,842, the S1 one-day pivot point.
This is what it looks like on the tool
About the Technical Confluence Detector
The TCD (Technical Confluences Detector) is a tool for locating and signaling price levels where there is congestion of indicators, moving averages, Fibonacci levels, pivot points, etc. If you are a short-term trader, you will find entry points for countertrend strategies and chasing a few points at a time. If you are a medium-long term trader, this tool will allow you to know in advance the price levels where a medium-long term trend can stop and rest, where to unwind positions, or where to increase your position size.