Gold Price Outlook: XAU Breakout - Too Far, Too Fast?

Support And Resistance June 07, 2019 (0)

Gold prices have surged more than 4.5% off the May lows with the breakout now testing the first major test of resistance. These are the updated targets and invalidation levels that matter on the XAU/USD charts.

Technical Outlook: In my latest Gold Price Weekly Outlook we noted that the breakout remained, “constructive while above 1275/76 heading into the open of June trade with a weekly close above 1302 needed to fuel the next leg higher in price.” A topside breach / close on Friday validates a breakout of the May opening-range with the advance now testing confluence resistance at 1328/29 – a region defined by the 2019 high-week close and the 78.6% retracement of the year range.

Gold 240min Price Chart XAUUSD

Gold

Notes: A closer look at price action shows Gold trading within the confines of an ascending pitchfork formation extending off the May lows with the upper parallel further highlighting the 1328/29 resistance zone. The immediate advance may be vulnerable below this level, but the trade remains constructive while above the weekly open at 1305. Look for initial support around the 61.8% retracement at 1315. A topside breach of this resistance barrier would keep the focus on subsequent objectives at the yearly high-day close at 1337