XAU Breakout Stalls at Resistance
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Gold Price Weekly Technical Outlook: XAU Breakout Stalls at Resistance
- Updated weekly technicals on Gold – Price carves February opening range below Fibonacci resistance
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Gold prices are set to snap a two-week winning streak with the precious metal down 0.26% to trade at 1314 ahead of the New York close on Friday. Here are the key targets & invalidation levels that matter on the Gold (XAU/USD) weekly chart.
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Gold Weekly Price Chart (XAU/USD)
Notes:In my previous Gold Weekly Technical Outlook we noted that the price breakout had,“achieved our initial resistance target and leaves the immediate advance vulnerable near-term,” while below Fibonacci resistance at 1322. Price has now set the February opening-range just below this threshold with weekly momentum testing resistance at the 70-threshold. The broader price breakout remains at risk while below this zone.
Initial support remains back at the 2018 open at 1302 with near-term bullish invalidation steady at the highlighted slope confluence around ~1290. ‘A breach higher from here targets the 2018 high-week close at 1350 backed closely by the 2016 trendline just higher around ~1360s.’
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Bottom line:The immediate focus is on a break of the 1302-1322 zone early in the month with the broader outlook weighted to the topside while above 1290. From a trading standpoint, we’ll favor fading weakness while above confluence support targeting a breach higher in price. Review my latest Gold Price Outlook for a closer look at the near-term trading levels.
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Gold Trader Sentiment
- A summary of IG Client Sentiment shows traders are net-long Gold - the ratio stands at +2.51 (71.5% of traders are long) – bearish reading
- Long positions are 3.5% higher than yesterday and 3.0% higher from last week
- Short positions are 0.7% higher than yesterday and 9.0% 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 & last week, and the combination of current positioning and recent changes gives us a stronger Gold-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
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