(MENAFN - DailyFX) Gold pricesin consolidation below key resistance pivot at 1522/26 Check out our 2019 projections in ourFree DailyFX Gold Trading Forecasts Join Michael for Live Weekly Strategy Webinars onMondays at 12:30GMT
Gold pricesfailed at a key resistance zone we've been tracking for months now and our immediate focus is on a near-term consolidation pattern taking shape just below. These are the updated targets and invalidation levels that matter on the XAU/USD charts this week.Review this my latest Strategy Webinarfor an in-depth breakdown of this gold trade setup and more.
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Gold Price Chart - XAU/USD Daily
Chart Prepared byMichael Boutros , Technical Strategist;Gold on Tradingview
Technical Outlook: In my latestGold Price Outlookwe warned that XAU/USD was, 'testing long-term uptrend resistance up here and the advance remains vulnerable while below.' The region in focus was 1522/26 – a region defined by the December 2011 & 2012 swing lows and both medium-term & long-term slope resistance. Price briefly registered a high at 1534 before reversing sharply last week with gold prices ranging just below for the past few days.
Daily support rests at the 50% retracement of the decline off the record highs at 1482 with broader bullish invalidation steady at 1451. A topside breach / close above this threshold is needed to mark resumption targeting 1558 and the 61.8%retracementat 1585.
Gold Price Chart - XAU/USD 120min
Notes: A closer look atgold priceaction shows XAU/USD turning from confluence support last week with price now trading within the confines of a near-term descendingpitchforkformation off the highs. Initial resistance stands with the 1.618% ext / weekly open at 1509/12. A break below the median-line / near-term support at 1493 would expose 1482- look for a more significant reaction there IF reached. Weakness beyond this zone would suggest that a larger correction is underway with such a scenario targeting the lower parallel (~1460s) & critical support at 1451.
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Bottom line: Gold prices remain at risk for a larger pullback while within this formation. From a trading standpoint, looking sideways to lower for now – a larger set-back may offer more favorable entries near uptrend support. Review my latestGold Weekly Outlookfor a longer-term look at the technical picture for XAU/USD prices.
For a complete breakdown of Michael's trading strategy, review hisFoundations of Technical Analysis series on Building a Trading Strategy
Gold Trader Sentiment
A summary ofIG Client Sentimentshows traders are net-long Gold- the ratio stands at +1.8 (64.3% of traders are long) – bearishreading Long positions are13.8% higher than yesterday and 5.8% higher from last week Short positions are2.9% lower than yesterday and 0.6% 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. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias from a sentiment standpoint.
See how shifts in Gold retail positioning are impacting trend-Learn more about sentiment!
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- Written byMichael Boutros , Currency Strategist with DailyFX
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