Gold price is holding onto the critical support in a cautious start to the new week. Will XAU/USD rebound from the key 23.6% Fibo level? FXStreet's Dhwani Mehta analyzes the pair's technical outlook.

23.6% Fibo level holds the key

“The 14-day Relative Strength Index (RSI) holds bullish while the 21-Daily Moving Average (DMA) pierced through the mildly firm 50 DMA for the upside on a daily closing basis, confirming a Bull Cross. These favorable technical indicators continue to add credence to the bullish potential in the Gold price.”

“Dovish Federal Reserve expectations combined with the renewed fears over the banking sector crisis could rekindle the upbeat momentum, prompting Gold price to resume its uptrend toward the yearly high of $2,010. However, reclaiming the March 21 high at $1,986 is critical to reversing the corrective downside.”

“Gold price correction could gather strength on a daily closing below the 23.6% Fibonacci Retracement (Fibo) level of the March advance, pegged at $1,963, below which the Bull Flag resistance-turned-support at $1,960 will be tested. Deeper declines will challenge the critical support at $1,935, which is the confluence of the 38.2% Fibo level, March 21 and 22 highs.”