Gold Price Analysis: Bullish bias intact while above critical $1777 support – Confluence Detector

Gold consolidated the recent bullish momentum and remained within a striking distance of the seven-year highs of $1789.28 reached last week. The bulls seemed undeterred by the risk-on rally in the global stocks amid underlying COVID concerns.  A test of $1800 mark on the cards?

The Technical Confluences Indicator shows that the yellow metal is ranging just below the critical resistance at $1787.70, which is likely capping the immediate upside. That barrier is the previous month high.

On a break above the latter, a test of the multi-year highs near $1790 is inevitable, where the pivot point one-day R1 and pivot point one-week R1 coincide.

The next target for the bulls remains the critical $1800 level.

The near-term upside bias in the spot remains intact as long as it holds above the major support of $1777, which is the convergence of the Fibonacci 61.8% one-day, Fibonacci 38.2% one-week and SMA 5 one-day.

The sellers will aim for the next support at $1775, the pivot point one-day S1. Should the price take out the latter, $1772 will be the downside target, the intersection of the SMA10 one-day, SMA200 one-hour and SMA50 four-hour.

The last resort for the bulls is seen at $1770, which is the Fibonacci 61.8% one-week.

Here is how it looks on the tool

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.

This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. These weightings mean that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas.

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