Gold : Recovery Near Resistance
(Thu, 11 Jun 2020). XAU/USD recovery approaching near-term downtrend resistance at monthly open. Gold prices rallied more than 3.2% off last week’s low with the advance now approaching near-term downtrend resistance.
GOLD PRICE CHART - XAU/USD DAILY
Technical Outlook: In my last Gold Price Outlook we noted that XAU/USD was,“approaching uptrend support and we’re looking for a reaction.” Price rebounded off key near-term support last week at the May low / 100% Fibonacci extension of the mid-May decline at 1669/73 (low registered at 1670) with the advance now eyeing confluence resistance at 1731- a level defined by the a objective June open and the yearly high-day close. Ultimately, a breach / close above the yearly high-close at 1747 would be needed to mark resumption of the broader uptrend.
GOLD PRICE CHART - XAU/USD 120MIN
Notes: A closer look at Gold price action sees XAU/USD trading within the confines of a descending pitchfork formation with recent recovery now approaching initial resistance at 1726 backed by 1731- both regions of interest for possible topside exhaustion IF reached. Initial support now back at 1700 backed by 1691. A break / close below 1669/73 is needed to suggest a larger correction is underway towards 1645.
Bottom line: The gold rebound is now approaching near-term downtrend resistance at the objective monthly open. From a trading standpoint, look for reduce long-exposure / raise protective stops on a stretch into the upper parallel. Rallies should be capped by the upper parallel IF price is indeed heading lower.
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