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Gold Price Outlook: Gold Rally Stalls at Resistance- XAU/USD Levels

Gold Technical Price Outlook: XAU/USD Near-term Trade Levels

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Gold prices surged more than 7.7% off the monthly low with the XAU/USD faltering this week into technical resistance. The threat of a near-term pullback within the broader uptrend remains while below 1829 and we’re looking for a break of the weekly opening-range for guidance. These are the updated targets and invalidation levels that matter on the XAU/USD technical charts heading into the August close. Review my latest Strategy Webinar for an in-depth breakdown of this gold technical setup and more.

Gold Price Chart – XAU/USD Daily

Gold Price Chart - XAU/USD Daily - GLD Trade Outlook - GC Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview

Technical Outlook: In my last Gold Price Outlook we noted that XAU/USD had, “defended critical support at the yearly lows last week and the focus is on this subsequent recovery. From at trading standpoint, look for pullbacks to be limited to the 1760 IF price is heading higher on this stretch with a close above 1830 needed to shift the broader focus higher.” Bullion consolidated into the close of the week with a breakout on Monday faltering at the 100-day moving average (currently ~1810)- the immediate advance may be vulnerable while below this threshold with a breach / close above needed to challenge key resistance at the 61.8% Fibonacci retracement / July high-day close at 1825/29.

Gold Price Chart – XAU/USD 120min

Gold Price Chart - XAU/USD 120min - GLD Trade Outlook - GC Technical Forecast

Notes: A closer look at Gold price action shows XAU/USD trading within an ascending channel formation with the weekly opening-range preserved just above weekly-open support at 1781. A break below this level would threaten a larger pullback with such a scenario exposing the 38.2% retracement of the monthly advance / June low-day close at 1759/60 and 1728/29– both levels of interest for possible downside exhaustion IF reached. Initial resistance eyed at the 2012 high at 1795 with a breach above the weekly highs exposing the August open at 1814 and 1825/29– look for a larger reaction there IF reached.

Bottom line: Gold turned just ahead of key resistance levels into the monthly open. From a trading standpoint we looking for a break of the weekly opening-range for guidance- losses should be limited by 1729 IF price is heading higher with a breach / close above 1829 ultimately needed to fuel the next leg towards the yearly high-week close. Review my latest Gold Weekly Price Outlook for a closer look at the longer-term XAU/USD technical trading levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Gold Trader Sentiment – XAU/USD Price Chart

Gold Trader Sentiment - XAU/USD Price Chart - GLD Retail Positioning - GC Technical Outlook

  • A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.40 (70.60% of traders are long) – typically bearishreading
  • Long positions are0.35% lower than yesterday and 4.98% higher from last week
  • Short positions are2.73% lower than yesterday and 11.38% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger Gold-bearish contrarian trading bias from a sentiment standpoint.

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– Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex