Remember that gold symmetrical triangle we had our eyes on early this month?
The chart pattern is still intact, and the precious metal is back to testing the top!
Take a look at these inflection points to gauge if a breakout may be due.
Gold (XAU/USD) 4-hour Forex Chart by TradingView
As market sentiment and dollar price action continues to toss and turn, gold has found itself still stuck inside its triangle holding pattern that’s been holding since late April.
But with the consolidation getting tighter and tighter, is the precious metal prime for a breakout soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and gold, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price is currently testing the triangle resistance around the $3,400 major psychological mark and R2 ($3,413.71) and a continuation of the rally past this area could take XAU/USD to the next upside targets at R3 ($3,449.76) then R4 ($3,485.82) near its record highs.
On the other hand, bears defending the triangle top could drag gold back to the support zones at the pivot point level ($3,345.84) then S1 ($3,314.03) near the triangle bottom.
Note that the 100 SMA is below the 200 SMA to suggest that resistance is more likely to hold than to break, although price has also climbed above both moving averages as an early indication of a bullish shift.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
