On Monday, the gold price gets a new buy and retests the two-week highs of $1795 thanks to persistent US dollar weakening across the board. In response to a worse Chinese Caixin Services PMI and ongoing Delta covid strain concerns, the greenback resumes its post-NFP fall following a brief rally earlier. However, the dollar’s rise appears to have stalled amid holiday-weakening market conditions, as investors reassess the chances of the Fed’s hawkish policy action after US payrolls surpassed estimates by 150K last month, pushing unemployment to 5.9%.
To flex their muscles beyond $1800 and beyond, gold bulls need a definitive breach over the $1795 supply zone. As the new week begins, the US ISM Services PMI and FOMC minutes remain in focus.
Read: Gold is expected to rise further over $1795-$1797, with the focus shifting to the Fed minutes.
The Technical Confluences Detector reveals that gold is gaining strength as it approaches Friday’s high of $1795, above which the bullish commitments en-route $1800 will be tested by the confluence of the SMA100 four-hour and pivot point one-day R1 at $1797.
Acceptance above $1800 might set the stage for a rapid move towards the pivot point one-week R, which is currently at $1805.
At $1813, the Fibonacci 38.2 percent one-month, the next significant upside barrier for gold awaits.
In the meanwhile, a failure to hold above Friday’s high might bolster bearish sentiment, exposing significant resistance-turned-support at $1789, where the SMA100 one-day coincides with the Fibonacci 23.6 percent one-day and one-month.
The next objective for sellers will be $1785, which is the intersection of the previous low four-hour and the Fibonacci 23.6 percent one-week.
The Fibonacci 61.8 percent support level of $1782 may next be tested.
For gold bulls, the line in the sand is around $1776, which is a dense cluster of strong support levels that includes the SMA10 one-day, SMA50 four-hour, and Fibonacci 38.2 percent one-week.
The TCD (Technical Confluences Detector) is a tool that locates and highlights price levels where indicators, moving averages, Fibonacci levels, Pivot Points, and other indicators are converging. If you’re a short-term trader, you’ll look for counter-trend entry points and hunt for a handful at a time. If you’re a medium-to-long-term trader, this tool will help you predict where a medium-to-long-term trend will halt and rest, where you should unwind positions, and where you should raise your position size./n
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