(MENAFN- DailyFX) Gold Technical Outlook Weekly technicals on Gold (XAU/USD) price recovery from confluence support in focus Check out our 3Q projections in our Join Michael for Live Weekly Strategy Webinars on Gold prices snapped a two week losing streak with the precious metal rallying more than 1% to trade at 1221 ahead of the New York close on Friday. While this week's reversal comes amid broad based weakness in the and while it does bode well for the bulls, price continues to hold below a critical resistance barrier and the focus is on a breach higher to mark resumption. Here are the updated targets and invalidation levels that matter on the XAU/USD weekly chart. for an in-depth breakdown of this setup and more.
Gold Weekly Price Chart Technical Outlook:
In our last , we stated that, 'Put simply, IF gold prices are going to rebound, next week would be the time- and the support zone we're trading into would be the place.Price responded to confluence support this week at 1201 (intraday low registered at 1196) before reversing sharply. This region is defined by the 50% retracement of the August advance and converges on the median-line of the descending extending off the 2017 /2018 swing highs.
The subsequent rebound has taken price through monthly open resistance at 1214 with gold rallying more than 2.4% off the monthly lows. The bulls aren't in the clear just yet the resistance confluence at 1235/38 remains critical with a weekly close needed to fuel the next ‘leg' higher targeting 1262. IF price fails ahead of this region, gold could threaten a retest of long-term slope support down at 1191 with broader bullish invalidation steady at the low-week close at 1184.
Bottom line:
Gold prices have rallied for the past four consecutive days after rebounding from confluence support. The threat remains of a pullback next week but IF prices are heading higher on this stretch, look for support head of the median-line with a breach above 1238 needed suggest a more significant low is in place. Review this week's for a complete technical breakdown of the intraday trading levels.
Gold Trader Sentiment IA summary of shows traders are net-long Gold - the ratio stands at +5.07 (83.5% of traders are long) bearish reading Long positions are 7.0% lower than yesterday and 5.5% lower from last week Short positions are 12.1% higher than yesterday and 3.0% lower 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. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long. Key Economic Data Releases Next Week - Written by , Currency Strategist with DailyFX
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