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Gold Technical Price Forecast: XAU/USD Weekly Trade Levels
Gold prices are poised to mark a fourth consecutive weekly decline with XAU/USD more than 2% since the start of the week. The decline is now testing key support targets and we’re on the lookout for a possible exhaustion low in the weeks ahead. These are the updated targets and invalidation levels that matter on the XAU/USD weekly price chart. Review my latest Weekly Strategy Webinarfor an in-depth breakdown of thisgold technical setup and more.
Gold Price Chart – XAU/USD Weekly
Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview
Notes: In last month’s Gold Weekly PriceOutlook we noted that a, “technical breakdown of a multi-week range in gold keeps the risk tilted to the downside heading into the close of the month.” For week’s now we’ve been focused on two specified support objectives at the 2021 high-week close at 1849 and the 100% extension of the yearly decline / 61.8% Fibonacci retracement of the 20221 rally at 1818/28. Gold is attempting to break the first of these levels today and the focus is on the weekly close.
Initial resistance is eyed at the May 2020 high-week close at 1903 with bearishinvalidation now lowered to the April high-week close (outside reversal week) at 1926- a breach / close above this threshold would be needed to suggest a more significant low is in place. A break lower from here keeps the focus on 1818/28 – losses beyond this threshold would be extremely damaging from a technical standpoint with such a scenario exposing the yearly low-week close at 1791 and beyond.
Bottom line: The gold breakdown is probing the first of two major support levels and a weekly close below 1849 would be needed to keep the focus on a drive into 1818/28- looking for a larger reaction there IF reached. From a trading standpoint- look to reduce short-exposure / lower protective stops on a stretch towards confluent support. IF the weekly close recovers above 1849- the threat for a larger rally rises. Keep in mind we have key US Core Inflation data on tap tomorrow- stay nimble here and respect the weekly close. Review my latest Gold Price Outlook for a closer look at the near-term XAU/USD technical trade 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 +5.05 (83.48% of traders are long) – typically bearishreading
- Long positions are4.04% higher than yesterday and 0.26% lower from last week
- Short positions are 2.33% lower than yesterday and 7.34% 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.
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Previous Weekly Technical Charts
– Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
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