XAUUSD Weekly Technical Outlook
The XAUUSD market has been on a positive run for quite a while. However, on the weekly time frame, the bullish momentum is declining. The last two weeks saw price action printing two rejection bearish candlesticks at a multi-year horizontal resistance zone. As last week’s candlestick is a strong bearish candlestick, in the early part of this week, we may see bears retest the low of the bullish candlestick printed three weeks ago – which is in confluence with the monthly pivot, 1491.91.
On the daily time frame, price action shot above a lower rising channel (with blue lower boundary) to operate in a higher rising channel (with red upper boundary), indicating an increase in bullish momentum. However, presently, the momentum has turned southwards in the upper channel with the printing of two bearish candlesticks on Thursday and Friday, and the technicals favour further southward move. We may see a penetration of the lower channel in the early part of this week.
On the H4 time frame, recent price action has tested the lower boundary (magenta) of the rising channel within which it has been operating since mid-August. Three of the candlesticks printed in the area have been relatively big and penetrated the channel support trendline. A breakdown of the channel support is likely to lead to a retest of the 1490 area; from which price operation rallied on August 23. Any further southward momentum is likely to expose the 1472 horizontal support area.
I may be wrong. Trade safe and prosper.