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Gold Weekly Technical Forecast: Bullish Above 1970 Weekly Close
- All eyes on gold’s weekly close ahead of the 4-day Easter weekend
- Bullish continuation and invalidation levels identified and discussed
Gold has put together a phenomenal bullish advance over the last 5, arguably 6, trading days prior to Thursday. The precious metal put in a strong rejection of the 1915 level which forms the origin of the latest bullish move.
Before that, price action had been oscillating largely between 1915 and the zone of resistance with a midpoint of 1965. Twice we witnessed a breakdown of the 1915 level which ultimately rejected lower prices by closing back above 1915 on both occasions – further reinforcing the multi-week range.
Then on Wednesday gold broke and held above the zone of resistance (blue rectangle), reigniting interest from buyers and reviving possibilities of a return to the psychological level of 2000.
XAU/USD Key Technical Levels
In the afternoon session in London, gold witnessed a fair amount of selling as the dollar (DXY) rose back above the crucial 100 mark. However, a close above trendline support and the upper side of the zone of resistance (blue rectangle, 1970) would maintain a bullish posture heading into next week. The pullback is a welcome sign, especially after the 5/6 successive daily gains and may present a more attractive level for bullish continuation.
However, a close below the zone of resistance could invalidate the recent breakout as a ‘fakeout’ and result in prices returning back to the prior range. Once again, I believe a close below 1970 opens the door to lower gold prices in the week ahead.
Gold (XAU/USD) Daily Chart
Source: TradingView, prepared by Richard Snow
The 4-hour chart with the shorter-term trendline shows the recent advance and a bit more insight into how gold is likely to shape up ahead of next week. With the 4-day Easter weekend, liquidity will be rather thin, meaning we may see volatility pick up ahead of Tuesday. Therefore, Thursday’s daily and weekly close could very well inform where we start next week.
Gold (XAU/USD) 4-Hour Chart
Source: TradingView, prepared by Richard Snow
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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