Jimmy Renner 
Chart Prepared by Michael Boutros, Technical Strategist; Gold on Tradingview
Technical Outlook: In my last Gold Price Outlook we warned that XAU/USD had, “made a strong defense of support into the close of September with the October opening-range set just above uptrend support- we’re on breakout watch. From a trading standpoint, look for downside exhaustion head of the lower parallel IF price is indeed heading higher with a breach above 1791/95 needed to fuel the next leg-up in price.” A near-term breakout last week saw price register an intraday high at 1800 before pulling back with price unable to close above the June trendline / 100-day moving average. We’re on the lookout for possible downside exhaustion on this pullback.
Daily support rests at the 61.8% Fibonacci retracement of the late-September rally at 1751 – we’ll reserve this threshold as our near-term bullish invalidation level with a break below threatening another bout of acerated losses towards key support at 1725/29.
Notes: A closer look at Gold price action shows XAU/USD continuing to trade within the confines of an ascending pitchfork formation extending off the September lows. Initial support rests at 1761 backed by the lower parallel / 61.8% retracement at 1751– losses should be limited to this threshold IF price is indeed heading higher. Initial resistance steady at 1780 backed by 1791/95– a breach of the highs exposing subsequent objectives at the 100% extension at 1809 and a more critical confluence at 1825/29 – a region defined by the 61.8% retracement of the June decline and the July high-day close. Look for a larger reaction there IF reached.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
– Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
This content was originally published here.
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