Caonfluence Detector’s Gold Price Forecast: XAU/USD bounces despite pre-Fed uncertainties, key levels to keep an eye on.
It is generally anticipated that the Federal Reserve would raise the key interest rates by 75 basis points (bps) at their meeting in July. This would be the second straight super-sized lift-off. Despite the increased likelihood of a recession, Federal Reserve Chair Jerome Powell has not wavered in his commitment to bring inflation under control.
On the other hand, the U.S. dollar and Treasury rates cannot gain on the possibly hawkish narrative, as investors instead choose to reposition themselves in front of the critical event risk for this week. The price of XAU/USD has been given much-needed relief due to this development, which has enabled the metal to post a solid return on Wednesday. Despite widespread caution, bulls remain unfazed, and factors such as U.S. tech results and the turmoil in Europe’s gas industry will be constantly monitored.
XAU/USD: Some Important Levels to Keep an Eye On
According to the Technical Confluence Detector, XAU/USD shows signs of gaining momentum to break out of the supply zone at around $1,727.
This level marks the convergence of the one-week Fibonacci 23.6% retracement and the one-day retracement of the pivot point.
The previous day’s high, which stood at $1,729, will come to the quick aid of sellers in this situation. A decisive move over the latter will prompt a test of the one-day R2 pivot point, which is now at $1,734.
The previous week’s high, the pivot point one-day R3, and the Fibonacci 161.8 percent one-day converge around the $1,740 area. If prices continue to rise, they will pose a danger to a dense group of resistance levels that have been heaped up around this area.
Alternately, the Fibonacci 38.2 percent one-day level of $1,720 is the next critical cushion for buyers of XAU. The $1,717 demand region might be threatened if this level is broken.
When you reach that position, the Fibonacci 38.2 percent one week, the SMA5 one day, and the 23.6 percent one day all coincide. Bears will have difficulty breaking below $1,714, which is where the low from the previous day and the SMA50 four-hour meet.
Confluences Detector, Technical: Some Background Information.
The Technical Confluences Detector, often known as TCD, is a tool that can find and point out those price levels where there is a congestion of technical indicators, such as moving averages, Fibonacci levels, Pivot Points, and so on. Find entry opportunities for counter-trend techniques and search for a few points at a time if you are a short-term trader. This will allow you to maximize your profits. This tool will inform you of the price levels where a medium-to-long-term trend may halt and rest, where to unwind holdings, or where to raise your position size. You will find this tool handy if you are a trader focusing on medium- to long-term investments.