Gold flickers ahead of FOMC, NFP – November levels
Gold Price Technical Outlook: XAU / USD Short Term Trade Levels
Gold price Extended in a key pivot area last week and while the broader focus is constructive, the risk of exhaustion remains until the November open. Those are the updated targets and invalidation levels that rely on the XAU /USD technical charts before the FOMC and the United States Non-farm payroll this week. Review my last Strategy webinar For a deep breakdown of this golden technique implement and more.
Gold Price Chart – XAU / USD Daily
Graphic prepared by Michel Boutros, technical strategist; Gold on Tradingview
Technical perspectives: Last month Gold Price outlook we noted that,“A retreat from a major resistance pivot last week leads us to look for uptrend support before 1751.” The initial emphasis was on resistance to 1791/95 with a topside, “breaking highs exposing subsequent goals to the 100% extension to 1809 and a more critical confluence at 1825/29.Gold had already bottomed that day at 1760 before climbing higher with the lead registering a high just above the 1809 resistance target last week (high at 1813). More than 2% drop in highs now overlaps June trend line / 100 day moving average around ~ 1787 in weekly / monthly opening – is the gold rally exhausting here?
Gold Price Chart – XAU / USD 240min
Remarks: Let’s take a closer look Gold price action shows XAU / USD continues to trade within the upside limits fork training, we followed the lows of September. The rally is trying again rresistance To 1791/95 in the weekly opening. Initial Support rests at 1772 with key support now raised to 61.8% Fibonacci retracement of the rally from the end of September to 1757–look for a lower before this threshold IF the price is indeed rising. An upper breach of this resistance zone exposes later targets to 1809 and 1825/29 – a region defined by the 61.8% retracement of the June drop and the July high day close (potential for a major breakout). Look for a stronger reaction if it is achieved.
At the end of the line : Gold risks short-term depletion as part of the broader uptrend through the November open. From a business standpoint, be on the lookout for a trough before the lower parallels with an upper breach / fence above 1809 needed to fuel the next step towards a key resistance closer to 1830. Observe a breakout / close below 1757 with such a likely scenario to trigger another episode of accelerating losses. Stay agile in the monthly opening with the FOMC US interest rate and NFP decision under review this week – expect volatility. Review my last Weekly Gold Price Outlook for a closer look at longer-term XAU / USD technical trading levels.
For a full description of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Tranking Sstrategy
Gold Trader Sentiment – XAU / USD Price Chart
- A summary of Sentiment of IG customers shows that traders are long on gold – the ratio is +2.45 (70.98% of traders are long) – usually bearishreading
- Long positions are5.39% less than yesterday and 3.46% less than last week
- Short positions are34.91% more than yesterday and 19.45% more than last week
- We generally take a contrarian view of crowd sentiment, and the fact that traders are net long suggests that gold prices may continue to decline. However, traders are shorter than yesterday and compared to last week. Recent changes in feeling warn that the current trend in gold prices may soon reverse to the upside despite traders remaining net to buy.
Active technical configurations
– Written by Michel Boutros, Technical strategist with DailyFX
To follow MIchael on Twitter @MBForex