XAU/USD outlook: Gold cracks key resistance zone on fresh wave of safe haven demand

Slobodan Drvenica Windsor Brokers

XAU/USD

Gold price rose on Thursday morning as new packages of increased US import tariffs took effect, adding to high global uncertainty and prompting investors into safety.

Fresh rise cracked strong resistances at $3400 zone (Fibo 76.4% of $3438/$3268 / psychological /upper triangle boundary) but failed to break higher on first attempt.

As expected, bulls faced headwinds and metal’s price eased to the mid-point of congestion that extends into third straight day.

Technical picture on daily chart has improved, but flat momentum (slightly above the centreline) and overbought stochastic warning, after gold faced a double false break below and above triangle recently.

However, triangle is narrowing, and eventual clear break is likely to be seen in coming sessions that would generate fresh direction signal.

Current favorable fundamentals contribute to bullish scenario, with sustained break above $3400 zone to signal bullish continuation and expose targets at $3438 and $3452 (tops of July 23 / June 16) guarding key barrier at $3500 (new record high, posted on Apr 22).

Conversely, violation of triangle support line ($3347) would weaken near-term structure, but extension below daily cloud top ($3335) will be required to verify fresh negative signal and shift focus towards key supports at $3300 / $3286 / $3268 (psychological /daily cloud base / July 30 multi-week low).

Res: 3400; 3405; 3414; 3438.
Sup: 3365; 3353; 3347; 3335.

Interested in XAU/USD technicals? Check out the key levels

1. R3 3410.59
2. R2 3397.97
3. R1 3383.54
PP 3370.92
1. S1 3356.5
2. S2 3343.88
3. S3 3329.45

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.

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