Gold Price Analysis: XAU/USD path of least resistance is down, $1,718 eyed – Confluence Detector

The Federal Reserve has dealt a blow to gold on Friday and more may be in store. By letting a pandemic era rule lapse, the Fed is forcing banks to sell some of their bonds, and the market immediately offloaded US debt. The resulting increase in Treasury yields makes the precious metal less attractive. 

On the other hand, the move was somewhat expected with both bonds and gold able to recover.

How is XAU/USD positioned on the charts?

The Technical Confluences Detector is showing that gold faces resistance at $1,740, which is the meeting point of the Bollinger Band one-day Middle, the previous weekly high and the Simple Moving Average 50-15m. 

The next cap awaits at  $1,754, which is the convergence of the Fibonacci 23.6% one-month, the Pivot Point one-day Resistance one and the previous day's high. 

Further above, the upside target is $1,776, which is the confluence of the Fibonacci 38.2% one-month and the PP one-week R2. 

Weak support is at $1,726, which is a juncture including the SMA 200-1h, the SMA 50-4h, and the Fibonacci 23.6% one-day. 

The next cushion is only marginally more significant – at $1,718, XAU/USD will find the meeting point of the previous day's low and the PP one-day S1. 

XAU/USD resistance and support levels

Confluence Detector

The Confluence Detector finds exciting opportunities using Technical Confluences. The TC 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. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies.

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