XAUUSD Weekly Technical Outlook
The XAUUSD market has a positive tone. However, the bullish momentum is waning. On the weekly time frame, price action has struggled for three weeks to break out of a horizontal resistance zone that was last visited in June 2018. In fact, last week, price action printed a bearish candlestick in the area. The technicals on the weekly time frame are ambivalent.
On the daily time frame, on January 3, 2019, price action made a 61.8 Fib retracement of the downward swing from April 11, 2018. Thereafter, it entered a horizontal consolidation for several days. Last week Friday, price action moved southward, about 50 pips, below the area of consolidation. Technnically, there is still a likelihood of further northward move, but we may see bears take price action further southward in the early part of this week before a bullish turnaround. The inner ascending trendline (black) could act as support. However, we should watch out for a significant break of the outer ascending trendline (red), which will invalidate any bullish outlook.
On the H4 time frame, recent price action has broken down and invalidated a minor ascending trendline (magenta) from recent lows. We may see a southward continuation this week. The 1255.90 area is a horizontal support, which may be a target of bears.
I may be wrong. Trade safe and prosper.