Gold Price Forecast: XAU/USD could see a bumpy road to recovery toward $1,930 – Confluence Detector

• Gold price is licking its wounds amid a broad United States Dollar rebound.
• Dovish Fed expectations, weak US Treasury bond yields could limit Gold’s downside.
• Gold traders await Friday’s US NFP and Fed Powell’s speech next week for fresh cues.

Gold price (XAU/USD) is defending a minor bid, staying calm after two back-to-back days of intense volatility, steered by the major central banks’ policy decisions. The US Dollar is holding onto its recovery momentum after reaching the lowest level in ten months on the dovish Federal Reserve outcome. Disappointing earnings reports from the American tech giants, Apple Inc., Amazon.com Inc. and Google parent Alphabet Inc., have unnerved markets and lifted the US Dollar demand across the board. The persistent weakness in the US Treasury bond yields, however, is lending support to the Gold price. The focus now shifts toward Friday’s US labor market report and Fed Chair Jerome Powell’s speech scheduled next week for a fresh direction in the Gold price.

Also read: US January Nonfarm Payrolls Preview: Analyzing Gold price's reaction to NFP surprises

Gold Price: Key levels to watch

The Technical Confluence Detector shows that the Gold price is defending strong support aligned at $1,910, where the previous day’s low and the previous week’s low coincide.

A sustained move below the latter will fuel a sharp drop toward the $1,901 level, which is the convergence of the Fibonacci 38.2% one-month and the Bollinger Band four-hour Lower.

Should the downside extend Gold sellers will threaten the pivot point one-day S1 at $1,896.

Alternatively, the immediate resistance is seen at the Fibonacci 23.6% one-month at $1,920, above which the Fibonacci 23.6% one-day at $1,923 will be tested.

The next critical upside barrier is placed at around $1,929, which is the intersection of the SMA5 one-day, Fibonacci 38.2% one-day and the SMA100 on-hour.

Gold bulls need to find a strong foothold above that key hurdle to resume their journey toward the multi-month high of $1,960.

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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.