1295. A weekly close above this threshold would give prices hope of a near-term rebound. Critical long-term resistance remains at 1380/91.
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Last week we highlighted that prices had, “set a clean monthly opening-range just above basic trendline support and we’ll be looking for a break of this region for further guidance on the near-term outlook.” A break early in the week kept the near-term focus lower in prices with the decline taking gold back below the June highs. Interim support is eyed at 1281 backed by more a more significant confluence at 1263/68. Key resistance & near-term bearish invalidation stands at 1325- a close above that threshold would be needed to mark resumption of the broader up-trend.
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A closer look at price action highlights gold prices continuing to trade within the confines of this well-defined descending channel formation. The break below the monthly opening range has us looking for a near-term low next week. That said, be mindful of rallies sub-1304 with a move lower targeting the aforementioned support targets.
Bottom line: look for sideways to lower price action early next week with a breach above channel resistance needed to suggest a larger recovery is underway.
—Written by Michael Boutros, Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.