(MENAFN- DailyFX) breakout targeting critical resistance- constructive above 1208 Check out our 3Q projections in our Join Michael for Live Weekly Strategy Webinars on The breakout above yearly down-trend resistance in Gold has fueled a rally of nearly 4% off the monthly lows with the advance failing just ahead of a key resistance range in price. These are the updated targets and invalidation levels that matter on the XAU/USD charts from here. for an in-depth breakdown of this setup and more.
Gold Daily Price Chart Technical Outlook: In our latest our ‘bottom line' noted that price had, 'cleared a technical resistance confluence / the monthly opening-range high and keeps the outlook weighted to the topside… From a trading standpoint, I'll continue to favor fading weakness while above this week's open at 1203 targeting the 1235/38 resistance range. The registered a high at 1233 this week before turning lower with gold unable to close above the 100-day moving average for the past four sessions. Key near-term support rests at 1214/15 pivot zone with the outlook weighted to the topside while above the objective monthly high at 1208.
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Gold 240min Price Chart Notes: A closer look at price action shows gold continuing to trade within the confines of the ascending pitchfork formation highlighted in last week's . The advance took out two of our targets before turning with the pullback taking the shape of a possible bull-flag formation. A breach above the resistance confluence around 1227 is needed to fuel a push into the 1235/38 resistance target- expect a more significant reaction there.
A break below 1214 would risk a larger decline with such a scenario targeting former slope resistance (red) around ~1208 and the 25% line / 38.2% retracement at 1205 both levels of interest for possible exhaustion / long-entries if reached. Ultimately a rally surpassing would be needed to mark resumption of the breakout with subsequent topside objectives eyed at the August low at 1251 and the October 2017 low / 50% retracement at 1261/63.
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Bottom line: The immediate focus for gold is on a break of the 1214-1239 price range for guidance from a trading standpoint, I'll continue to favor fading weakness in price targeting a breach of this key resistance zone. For now, If you're not already long, looking for either a drop into 1214/15 OR a breach & re-test of 1238 to offer possible entries.
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Gold Trader Sentiment A summary of shows traders are net-long Gold - the ratio stands at +4.47(81.7% of traders are long) bearishreading Long positions are0.5% higher than yesterday and 8.5% lower from last week Short positions are 3.1% higher than yesterday and 54.1% higher from last week We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week and the recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long. See how shifts in Gold retail positioning are impacting trend-
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Active Trade Setups - Written by , Currency Strategist with DailyFX
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