XAU/USD outlook: Gold extends pullback on growing risk sentiment
XAU/USD
Gold price falls for the second day, as growing optimism over possible US-EU trade deal continues to fuel risk appetite and deflates safe-haven demand.
Fresh weakness emerged after bulls failed to register a clear break above trendline resistance (daily chart triangle’s upper boundary) with return below the trendline signaling a false break higher and generating bearish signal.
The yellow metal’s price lost around 2% since Wednesday’s opening and cracked pivotal support at $3365 (Fibo 38.2% of $3246/$3438, reinforced by 10DMA, with sustained break here to confirm reversal signal, following Wednesday’s completion of bearish engulfing and close below psychological $3400 support.
Technical picture on daily chart has weakened, although studies are still positive overall, suggesting that current weakness needs to find ground above the top of daily Ichimoku cloud ($3330) to keep larger picture bullishly aligned.
Otherwise, violation of cloud top and nearby lower triangle boundary ($3317) would generate stronger bearish signal and bring the downside at increased risk.
Res: 3393; 3400; 3419; 3438.
Sup: 3342; 3330; 3317; 3309.
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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.
