Gold bullish or nothing?
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.