Gold Price Outlook: Gold Breakout Potential- XAU/USD Opening-Range Setup

• Gold price updated technical trade levels – Daily & Intraday Charts

• XAU/USD carves monthly range above uptrend support at ~1744- key near-term resistance 1795

Gold prices rallied more than 3.4% off the September lows with XAU/USD trading at 1755 into the open of trade this week. Were on the lookout for possible exhaustion on this pullback with the immediate focus on a breakout of the monthly opening-range. These are the updated targets and invalidation levels that matter on the XAU/USD technical charts. Review my latest Strategy Webinar for an in-depth breakdown of this gold technical setup and more.

GOLD PRICE CHART - XAU/USD DAILY

Technical Outlook: In my last Gold Price Outlook we warned that XAU/USD was, “trading just above confluent support at 1729/38 – from a trading standpoint, a good zone to reduce short-exposure / lower protective stops. Losses should be limited this support zone IF price is indeed heading higher with a breach / close above 1774 needed to clear the way for a larger rally.” The sell-off went even deeper to register a low at 1721 before being caught by the 1.618% extension of the September decline / August low-day close at 1725/29. A substantial rebound ensued with Gold tipping the 50% retracement of the September decline before pulling back– the October opening-range is set with the focus on a breakout of 1744 – 1777.

GOLD PRICE CHART - XAU/USD 120MIN

Notes: A closer look at Gold price action shows XAU/USD trading within the confines of an ascending pitchfork formation extending off the September lows. Note that the lower parallel converges on the 61.8% Fibonacci retracement of the September decline near 1744 later this week – a break / close below this threshold would threaten another run on support targets at 1725/29, 1717 and 1707/12. Initial resistance steady at 1777 with a topside breach / close above the 61.8% retracement / 2012 high at 1791/95 needed validate a larger price reversal in Gold.

Bottom line: Gold made a strong defense of support into the close of September with the October opening-range set just above uptrend support- were 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. Stay nimble here- Ultimately weakness beyond 1707 would likely witness another bout of accelerated losses for the yellow metal.

Source: DailyFx