Market news
18.05.2022, 09:31

Gold Price Forecast: XAU/USD downside remains compelling below $1,821 – Confluence Detector

  • Gold Price remains vulnerable as the US dollar rebounds amid a damp mood.
  • A retreat in the US Treasury yields helps cushion XAU/USD’s downside.
  • The path of least resistance appears down for Gold Price.

Gold Price is fluctuating between gains and losses while above the $1,800 mark, licking its wounds after Tuesday’s rejection from the critical $1,836 hurdle. Gold Price faces headwinds from the resurgent haven demand for the US dollar, as investors fret over the growth and inflation concerns, in the face of the aggressive Fed rate hike expectations. On the other side, the negative shift in the market’s perception of risk has boosted the risk-off flows into the US government bonds, capping the rebound in the Treasury yields across the curve. Retreating yields are offering support to XAU/USD bulls. Looking ahead, in absence of relevant economic data from the US, Gold Price will remain at the mercy of risk sentiment and the dollar dynamics.

Also read: Gold Price Forecast: XAU/USD eyes a retest of multi-month lows below $1,800

Gold Price: Key levels to watch

The Technical Confluences Detector shows that the Gold Price is keeping its range below a dense cluster of powerful resistance stacked up around $1,817. That supply zone is the convergence of the SMA5 four-hour, Fibonacci 23.6% one-week and one-day.

The next stop for bulls is seen at $1,821, where the SMA100 one-hour and SMA10 four-hour converges with the Fibonacci 38.2% one-day.

Further up, gold buyers will have to battle out the SMA5 one-day and Fibonacci 61.8% one-day at $1,825 and $1,828 respectively.

The Fibonacci 38.2% one-week at $1,833 is the level to beat for gold bulls.  

On the downside, if the selling bias picks up pace, then the previous day’s low at $1,813 will be taken out.

Gold sellers will then target $1,807 demand area, where the pivot point one-day S1 and the previous low four-hour coincide.  

The previous week’s low at $1,799 will then come to the rescue of gold optimists, below which the pivot point one-month S2 at $1,797 will get challenged.

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About Technical Confluences Detector

The TCD (Technical Confluences Detector) 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.  If you are a short-term trader, you will find entry points for counter-trend strategies and hunt a few points at a time. If you are a medium-to-long-term trader, this tool will allow you to know in advance the price levels where a medium-to-long-term trend may stop and rest, where to unwind positions, or where to increase your position size.

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