Never miss a story from Michael Boutros

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Gold prices are trading within a well-defined range just below the monthly open and we’re looking for the break for guidance. These are the updated targets and invalidation levels that matter on the XAU/USD charts. Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

New to Gold Trading? Get started with this Free How to Trade Gold -Beginners Guide

Gold Daily Price Chart (XAU/USD)

Gold Price Chart - XAU/USD Daily

Technical Outlook: In my latest Gold Weekly Technical Outlook we noted that 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.” Price registered a low at 1303 early in the week with gold now setting the February opening-range between these key levels. A downside break would threaten a larger correction towards the highlighted slope confluence with our medium-term bullish invalidation steady around ~1290.

A topside breach / close above the 78.6% retracement / monthly open at 1322 is needed to mark resumption of the broader uptrend with subsequent topside objectives eyed at channel resistance / 88.6% retracement at 1342 and the 2018 high-day close at 1348.

Why does the average trader lose? Avoid these Mistakes in your trading

Gold 120min Price Chart (XAU/USD)

Gold Price Chart - XAU/USD 120min

Notes: A closer look at price action shows gold trading within the confines of a descending channel formation extending off the January high with price marking a near-term consolidation range just below the upper parallel. Immediate resistance stands with the weekly open at 1313 with a topside breach exposing 1317 and 1322- look for a larger reaction there for guidance.

Initial support rests with the outside two-hour reversal close at 1308 backed by near-term bullish invalidation at 1302. Weakness beyond this threshold would expose support targets at the 61.8% retracement at 1296 and 1292- an area of interest for exhaustion If reached.

Learn how to Trade with Confidence in our Free Trading Guide

Bottom line: We’re looking for a break of this near-term consolidation for guidance and while our broader outlook remains weighted to the topside, a break lower could risk a larger pullback before resumption. From a trading standpoint, we’ll favor fading strength while above while above 1302 targeting a topside breach of the monthly opening-range. Ultimately larger set-back would have us looking for exhaustion closer to slope support around 1290.

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

Gold Trader Sentiment

Gold Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-long Gold - the ratio stands at +2.43 (70.8% of traders are long) – bearishreading
  • Long positions are84.8% higher than yesterday and 1.3% higher from last week
  • Short positions are 79.2% higher than yesterday and 9.8% 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& 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!


Active Trade Setups

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex