XAUUSD is setting up a potential breakout if this triangle formation is valid. Gold bulls’ wait could be over soon in this sequence 1. break trend line. 2. break strong resistance. 3. new high.
Chart #1 – XAUUSD monthly chart 2007 to present
- These trend lines define a very large triangle.
- XAUUSD is trading towards it’s apex which could lead to a break out.
- The triangle is near symmetrical. Until a break happens, price could continue to be trapped inside it’s resistance/support.
- Overlaid is a 12-month exponential moving average.
- The moving average was a valuable roadmap for trading during uptrend years from 2009 – 2011 as a very visual support; it was also valuable from 2013 – 2015 as a very visual resistance.
Chart #2 – XAUUSD quarterly chart from 2003 – present
- Big blue boxes print year – year uptrend from 2003 – 2012.
- Uptrend is a series of new 52-week highs and higher lows.
- Uptrend was terminated in 2013 with a bearish expansion i.e. new 52-week low.
- From 2013 – 2015, XAUUSD was trading downtrend with series of new 52-week lows.
- Down trend years painted beige.
- XAUUSD printed a new 52-week high so this terminated the down trend. RIP Down Trend 2013 – 2015.
- With the new 52-week high, bulls could look for signs of a new up leg that could bring XAUUSD to 1900s.
- Horizontal region between 1326 – 1328 is strong resistance zone.
- Price has not closed above this region end-of-quarter since 2013.
- Any one of bottoms from 2013 – 2015 could be a support for price.
Note: Gold miners are exhibiting bullish signs as well. See this post ‘3 charts of gold miners for bulls and bears‘. Coincidence or strong evidence of correlation you decide.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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