Gold Technical Price Outlook: XAU/USD Weekly Trade Levels
Gold prices are poised to mark fourth consecutive weekly advance with XAU/USD rallying 0.77% to trade near the weekly highs on the heels of today’s US Non-Farm Payroll report. The advance is challenging a break of a major technical resistance confluence and a breakout may be in the cards as we head deeper into September trade. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this gold technical setup and more.
Gold Price Chart – XAU/USD Weekly
Notes: In my last Gold Weekly PriceOutlook we noted that the XAU/USD was, “testing the first major hurdle at downtrend resistance. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch into 1825/29..” – a region defined by the 61.8% retracement of the May decline & the 52-week moving average and converges on downtrend resistance. Gold is attempting to breach this threshold today with the post-NFP rally now probing above- watch the weekly close.
A topside breach would keep the focus on subsequent resistance objectives at the 2021 high week close at 1849 and a more significant technical confluence at the yearly high-close / 61.8% retracement of the 2020 decline at 1903/23. Monthly open support now rests at 1812 with backed by the 2012 high 1795 with bullish invalidation steady at 1755.
Bottom line: Gold has rallied more than 9% off yearly low with XAU/USD now attempting to breakout above a key resistance pivot. From a trading standpoint, we’re looking for a pivot / price inflection here –be on the lookout for downside exhaustion ahead of 1755 on pullbacks with a close above 1849 needed to mark resumption of the broader uptrend. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trade 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
- A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.57 (72.02% of traders are long) – typically bearishreading
- Long positions are2.46% higher than yesterday and 2.53% higher from last week
- Short positions are3.61% lower than yesterday and 7.89% 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.
Previous Weekly Technical Charts
– Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex