Gold (XAU/USD) is making another recovery attempt from five-month lows of $1765 as the US dollar dips on improved market mood amid coronavirus vaccine and US stimulus hopes. US Treasury Secretary Steve Mnuchin’s push for utilizing $455 billion from the CARES Act also bodes well for gold.
Although, gold’s corrective advance could lose steam, in the wake of hopes for an imminent vaccine rollout. Optimism over a swift vaccine-driven economic recovery diminishes gold’s attractiveness as a safe-haven. Focus shifts to the US data dump and Fed Chair Powell’s testimony.
How is gold positioned on the price charts?
Gold: Key resistances and supports
The Technical Confluences Indicator shows that the XAU/USD pair shows that the bright metal is looking to extend its recovery towards the critical $1800 level, which is the convergence of the Fibonacci 23.6% one-week, SMA100 one-hour and SMA200 one-day.
On its way to the abovementioned barrier, gold is likely to face strong offers around $1790, which is a cluster of dense resistance levels, comprising of the previous day high and Pivot Point one-day R1.
To the downside, an immediate cushion is seen at $1778, where the SMA5 four-hour coincides with the previous low on one-hour.
Further down, the earlier powerful resistance now support at $1775 could be challenged. That level is the intersection of the Fibonacci 38.2% one-day and the previous week low.
The next soft cap awaits at $1770, the convergence of the Fibonacci 23.6% one-day and Bollinger Band one-day Lower.
The confluence of the Pivot Point one-day S1, Bollinger Band four-hour Lower and previous day low at $1765 is the last resort for the XAU bulls.
Source from https://www.fxstreet.com/news/gold-price-analysis-xau-usd-braces-for-a-bumpy-road-to-reocvery-above-1775-confluence-detector-202012010309