Weekly Technical Outlook: XAU/USD ; Market Forecasts for January 25th – January 29th

• Resistance level   1109.62, 1117.71, 1127.55
• Pivot Level 1095.92
• Support Level 1085.37

Technical Analysis

Technically, on daily charts, XAU/USD has found good support at the trend line located at 1085.37 and climbs higher for a retest of 1109.62 levels. The next resistance would lie at 1117.71, testing psychological levels.

The daily oscillator at 47.00 has reversed its ranging direction and now inches higher, supporting the case for a rebound which is looking for a consolidation pattern from 1085.37 levels and is still in progress with strong support holding the levels. The price action produced strong bullish back to back two bar reversal, indicating a shift in the momentum to an upside bias.

With the pair closing above the break of trend line, it looks for a corrective upward bias and confirming a bullish movement. Medium term rally is still in progress from the bottom of market to an upward momentum and is looking stronger with sustained trading above 1095.92 and confirm strong long term momentum.

This will remain the favoured case as long as support holds and would pave the way to reach level at 1109.62. Breaks here could expect levels at 1117.71 and later at 1127.55.

Meanwhile, a break at 1085.37 levels will dampen our bullish view on the pair and should continue with the current momentum to downside, making new lower lows. Outlook remains bullish for week.

Economic

• Dallas Fed Manufacturing Business Index, Markit PMI Composite, Consumer Confidence
• New Home Sales Change, EIA Crude Oil Stocks change
• Fed Pace of MBS Purchase Program, Treasury Purchase Program, Monetary Policy Statement
• Initial Jobless Claims, Durable Goods Orders ex Transportation, Goods Trade Balance

Area of Interest

• Strong support at 1085.37 area and closed above break of trend line.
• Bullish back to back two bar reversal strongly closing above the support area.
• Price action closed above rebound of trend line and oscillator above 47.0 levels indicating shift in momentum.
• At Flip Area on Daily time frame support levels.

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