XAU/USD had defended critical support at the yearly lows last week and the focus is on this subsequent recovery. From at trading standpoint, look for pullbacks to be limited to the 1760 IF price is heading higher on this stretch with a close above 1830 needed to shift the broader focus higher. Bullion consolidated into the close of the week with a breakout on Monday faltering at the 100-day moving average (currently ~1810)- the immediate advance may be vulnerable while below this threshold with a breach / close above needed to challenge key resistance at the 61.8% Fibonacci retracement / July high-day close at 1825/29.
A closer look at Gold price action shows XAU/USD trading within an ascending channel formation with the weekly opening-range preserved just above weekly-open support at 1781. A break below this level would threaten a larger pullback with such a scenario exposing the 38.2% retracement of the monthly advance / June low-day close at 1759/60 and 1728/29- both levels of interest for possible downside exhaustion IF reached. Initial resistance eyed at the 2012 high at 1795 with a breach above the weekly highs exposing the August open at 1814 and 1825/29- look for a larger reaction there IF reached.
Gold turned just ahead of key resistance levels into the monthly open. From a trading standpoint we looking for a break of the weekly opening-range for guidance- losses should be limited by 1729 IF price is heading higher with a breach / close above 1829 ultimately needed to fuel the next leg towards the yearly high-week close.
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