- Gold prices poised to mark weekly reversal- focus is on key support at 1451/61
- Check out our 2019 projections in our Free DailyFX Gold Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
Gold prices are lower this week with the precious metal down more-than 1.3% to trade at 1484 ahead of the New York close on Friday. The risk remains for further losses after turning from long-term uptrend resistance last month and we’re looking for a reaction lower down. These are the updated targets and invalidation levels that matter on the XAU/USD charts this week. Review my latest Weekly 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 Price Chart - XAU/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview
Notes: In my last Gold Weekly Price Outlook we noted that XAU/USD remained, “at risk for further losses while below uptrend resistance here – form at trading standpoint, looking lower for now with a deeper set-back to offer more favorable long-entries closer to trend support.” Nearly three weeks later and prices have remained on the defensive with gold pulling away from critical resistance at 1522/26 – a region where the late-2011 / 2012 swing lows converges on longer-term slope resistance.
Initial support rests with the 75% parallel of the broader ascending pitchfork formation we’ve been tracking off the 2016 / 2018 lows (currently ~1475). Key medium-term support stands at 1451/61- look for a bigger reaction there IF reached with a break / weekly close below needed to suggest a more significant correction is underway. Note that RSI is attempting to close the week below the 70-threshold and further highlights the threat of a broader turn in the momentum profile. Ultimately, a topside breach above 1526 is needed to mark resumption targeting subsequent resistance objectives at 1558 and 1586.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom line: Gold prices remain vulnerable after reversing off long-term trend resistance. From at trading standpoint, the risk remains for a deeper pullback towards uptrend support – look for reduce short exposure / lower protective stops on a test of key support at 1451/61 – we’ll reassess the price reaction there IF reached. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading levels.
Gold Trader Sentiment – XAU/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +2.12 (67.9% of traders are long) – bearishreading
- Long positions are5.11% higher than yesterday and 0.45% higher from last week
- Short positions are8.10% lower than yesterday and 2.58% 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.
See how shifts in Gold retail positioning are impacting trend- Learn more about sentiment!
---
Previous Weekly Technical Charts
- Silver (XAG/USD)
- Euro (EUR/USD)
- Crude Oil (WTI)
- Japanese Yen (USD/JPY)
- Canadian Dollar (USD/CAD)
- US Dollar Index (DXY)
Learn how to Trade with Confidence in our Free Trading Guide
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
