Gold Price Outlook: XAU/USD Finds Support- Coronavirus Timeline Grows
Gold Technical Price Outlook: XAU/USD Weekly Trade Levels
- Gold priceupdated technical trade levels - Weekly Chart
- XAU/USD plunges into confluence support as Coronavirus outlook extends
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Gold prices have responded to a key technical support confluence as the Coronavirus outlook fuel fears of a prolonged outbreak. Is XAU/USD bottoming? We’re on the lookout for possible downside exhaustion as price tests a critical pivot zone. These are the updated targets and invalidation levels that matter on the gold weekly chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this XAU/USD trade setup and more.
Gold Price Chart - XAU/USD Weekly
Notes: In my last Gold Weekly PriceOutlook we noted that the XAU/USD breakout had, “stalled at confluence uptrend resistance and while the broader outlook remains weighted to the topside, the immediate advance is vulnerable while below this threshold.” A massive outside weekly-reversal candle fueled a steep sell-off (14.8%) that carried over into the weekly open with price registering a low at 1451 early in the session. We’re looking for a reaction down here.
Key support rests at the 100% extension / 38.2% retracement of the 2015 advance at 1447/52 with broader bullish invalidation set to the 2016 high-day close at 1366. Initial resistance now back at 1522/26- a weekly close above this threshold is needed to put the long-bias back in focus with subsequent resistance objectives eyed back at 1586 and the yearly high close at 1673- look for a larger reaction there IF reached.
Bottom line: Gold has responded to a major support pivot leaves the near-term short-bias at risk while above 1447/52- the focus is on the weekly with respect to the 1522/26 zone. From a trading standpoint, we’re on the lookout for signs of an exhaustion low to stage a larger recovery. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trading 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 +2.21 (68.86% of traders are long) – bearishreading
- Long positions are7.88% lower than yesterday and 11.09% lower from last week
- Short positions are17.10% higher than yesterday and 20.35% 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 less net-long than yesterday but more net-long from last week and the combination of current positioning and recent changes gives us a further mixed Gold trading bias from a sentiment standpoint.
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- Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.