The optimism around the less severe effects of the new Omicron covid variant continues to play out so far this week, downing the safe-haven US dollar. In lieu of this, gold price clinched fresh weekly highs, also benefiting from the weakness in the Treasury yields. Investors eagerly await Friday’s US inflation data for fresh trading impulse. Hotter US inflation is likely to seal in the Fed’s faster tapering, which could impede gold’s renewed upside.
The Technical Confluences Detector shows that the gold price is facing strong offers at $1,792, the powerful supply zone comprising of the SMAs100 and 200 one-day and the Fibonacci 61.8% one-week.
A firm break above the latter is awaited to extend the recovery momentum towards the $1800 level – the pivot point one-day R2.
The next critical upside hurdle is seen around $1,805, where the Fibonacci 38.2% one-month aligns.
On the flip side, immediate support is envisioned at the Fibonacci 23.6% one-day of $1,785.
If the selling pressure intensifies, then sellers would target the intersection of the Fibonacci 38.2% one-day and SMA10 one-day at $1,782.
Gold bears will need to crack the fierce support at $1,779, the confluence of the Fibonacci 61.8% one-day and SMA5 one-day, to open up the further downside.
Further south, $1,772 will be the level to beat for gold sellers. That level is the convergence of the previous day’s low and the Fibonacci 23.6% one-week.
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.