XAUUSD Weekly Technical Outlook
The XAUUSD market has disposed with a positive tone for quite a while. However, the northward momentum seems to be waning. On the weekly time frame, price action was sideways for much of this month until last week when a bullish candlestick took the market a bit further northward towards the immediate horizontal resistance (i.e. the 1347.00/1357.00 area) but was pulled back by bears. The bullish candlestick printed was ultimately in favour of bears, being a bearish pinbar. The nature of the pinbar portends the likelihood of a southward turnaround. However, how far such a move would be is a matter for the market to decide. But realistically, we can expect a brief northward move before a bearish turnaround.
A morning star formation appeared on the daily time frame after the Thursday session. Technically this is a bearish setup, particularly as it formed near a horizontal resistance zone that has held for quite a long while. Last Friday, bulls attempted to take price action northward but the attempt was checkmated by bears, resulting in the printing of a bearish pinbar. Besides, the technicals indicate a waning of a bullish momentum. However, as price action is still respecting a support trendline (red) traceable to November 2018, we may have to wait for a bearish breakdown of the trendline on a daily closing basis before having confidence in a southward turnaround.
Recent price action on the H4 time frame favours bears. A minor resistance trendline (black) from recent highs is being respected. During the penultimate session last week Friday, price action retraced towards a minor horizontal resistance zone (bound by magenta horizontal lines) but the candlestick printed ended up being a bearish pinbar. This was followed up by bears in the last session with the printing of a bearish continuation candlestick. However, the fact that the candlestick printed has a lower shadow indicates that bulls were still exerting some influence. Much likely, we may see a brief bullish move in the early part of this week, but, technically, bears are favoured to drive price action to at least retest the support trendline (red) traceable to November 2018.
I am bearish XAUUSD on a short-term basis.
I may be wrong. Trade safe and prosper.