Gold Price Forecast: Battle lines well-defined for XAU/USD, with eyes on Fed, yields – Confluence Detector

• Gold price rebounds but not out of the woods yet, focus on yields.
• Gold bull-bear tug-of-war likely to unfold ahead of Fed minutes.
• Gold could stage a deep correction if $1,850 becomes resistance. 

Gold is looking to snap its three-day downtrend, attempting a bounce above the $1,800 mark amid a minor pullback in the US Treasury yields. A corrective upside in gold price cannot be ruled out ahead of Wednesday’s US data dump and FOMC minutes, as markets reposition after the biggest daily loss incurred since mid-September.

Gold price tumbled 2% on Monday after Jerome Powell’s renomination as the Fed Chair triggered a sharp rally in the US Treasury yields on expectations of a faster pace of Fed’s tapering.

Read: Gold Price Forecast: XAU/USD eyes dead cat bounce towards $1,830 amid oversold RSI, focus on yields

Gold Price: Key levels to watch

The Technical Confluences Detector shows that the gold price is retreating towards the previous day’s low of $1,802.

The psychological $1,800 threshold will gain the sellers’ attention on a sustained move lower. At that level, the pivot point one-week S3 coincides.

The Fibonacci 23.6% one-month at $1,798 will be a tough nut to crack for gold bears.

If that caves in, then powerful support around $1,793 will challenge the bullish commitments. That point is the intersection of the SMA100 and SMA200 one-day.

Alternatively, stiff resistance is seen around $1,814, which is the convergence of the previous month’s high, Fibonacci 23.6% one-day and Bollinger Band four-hour Lower.

Acceptance above the latter will threaten the immediate cap at $1,817, the pivot point one-month R1.

The next significant upside barrier is envisioned at $1,821, the confluence of the pivot point one-week S2 and Fibonacci 38.2% one-day.

Here is how it looks on the tool

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.