The triangle pattern in which gold is currently trapped is holding, but the consolidation is becoming further condensed.
Is it about to explode? In what direction may it go?
These are the values that I am monitoring.
This precious metal has created a descending triangle pattern that has held so far this year, with lower highs made and support found at $2,015.
Changes in expectations for monetary policy, ongoing geopolitical tensions, worries about global growth, and erratic risk appetite have caused this safe-haven commodity to fluctuate between turning points.
Recall that market price volatility and directional biases are mostly determined by fundamentals. Check out the economic calendar and remain up to date on daily fundamental news if you haven't finished your enjoyable homework on gold and market emotion yet!
Gold is drawing closer to support after retreating from the triangle top, suggesting that it is preparing for another bounce near S1 ($2,011.38). Should the floor hold, XAU/USD may once again target resistance in the vicinity of the pivot point level and the dynamic inflection point of the 100 SMA.
A rise past the triangle top and onto the next upside targets at R1 ($2,041.02) and R2 ($2,057.69) might even be sparked by persistent bullish momentum. After all, a rally that reaches the same height as the chart pattern may occur after an upward breakthrough.
Conversely, a lower close would trigger a decline to S2, which is the next possible support level, at $1,998.30. The triangle bottom is more likely to break than to hold, as indicated by the fact that the 100 SMA is below the 200 SMA.
The oscillator is getting close to the oversold area, indicating that sellers will soon run out of steam, but stochastic is also moving lower, suggesting that negative pressure is at work.
Regardless of the bias you choose to trade, always employ trading plans and use the greatest risk management techniques!
