Gold outlook: Strong bearish signal on weekly close below broken $1975 higher base
Gold
Gold edges higher on Friday in consolidation of sharp fall (2.9%) in past three days and on track for the biggest weekly loss since the last week of January.
Metal’s price fell on fresh optimism over debt ceiling talks and the latest hawkish shift in Fed’s rhetoric, which hinted possible further rate hikes, against signals of a pause in policy tightening cycle and speculations of rate cuts towards the end of the year, which made the dollar attractive.
Gold price lost ground on weaker sentiment and fell below important supports at $2000 / $1975 (psychological / Fibo 38.2% of $1804/$2080 / higher base), hitting two-month low, after penetrating rising and thickening daily cloud (top of the cloud lays at $1964).
Near-term action is likely to pause on oversold daily studies, but bears are expected to hold grip and keep in play expectations for further drop.
Weekly close below broken $1975 level (now reverted to resistance) to confirm break and keep bearish near-term stance, with close within the cloud, to boost negative signal for extension towards targets at $1942/26 (50% retracement of $1804/$2080 / daily cloud base) and risk test of $1920 (bull trendline drawn off $1616, Oct 2022 low) in extension.
Res: 1968; 1975; 1992; 2000.
Sup: 1951; 1942; 1926; 1920.
Interested in XAU/USD technicals? Check out the key levels
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
