- Gold price s recovery fails just ahead of resistance- focus is on critical support at 1451/56
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Gold prices reversed an early-week advance on the heels of the Non-Farm Payroll release with XAU/USD down 0.30% ahead of the New York close on Friday. The decline takes gold back into a critical pivot zone we’ve been tracking for months now. These are the updated targets and invalidation levels that matter on the XAU/USD weekly chart. Review my latestWeekly Strategy Webinar for an in-depth breakdown of this gold price setup and more.
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Gold Price Chart - XAU/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview
Notes:In my last Gold Price Weekly Outlook we noted that XAU/USD was, “rebounding off major support with the advance still at risk while below channel resistance.” The focus was on the, “descending channel formation extending off the yearly highs with confluence trendline resistance eyed around 1490s – look for a reaction there IF reached.” Price registered a high at just shy of 1484 this week before turning sharply lower on the back of Friday’s US Non-Farm Payroll release- so was that the high we were looking for?
The decline pared the entire weekly advance with price now poised to close just above critical support at 1451/56- a region defined by the November low-close and the 100% extension of the 2015 advance. A break / close below this threshold is needed to mark resumption of the medium-term downtrend with such a scenario targeting the median-line / 100% extension of the September decline at 1420 backed by the 38.2% retracement of the 2018 advance at 1405. Weekly resistance remains steady at 1488/90 – a close above this zone would be required to suggest a more significant low is in place.
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Bottom line:The recent recovery in Gold prices failed just ahead of down-trend resistance and take XAU/USD back into a critical support zone. From a trading standpoint, a good place to reduce short exposure / lower protective stops. Look for a reaction here with a close below needed to keep the immediate short-bias viable. As noted earlier this week, “Ultimately, we’re looking for a break of the 1451-1490range for further guidance on our medium-term directional bias.” Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
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