Gold appears to be consolidating in the middle of a developing symmetrical triangle pattern. Could bears potentially take control after a downside break of the Pivot point and rising ‘lows’ pattern?
Let’s check out these key inflection points to watch on the 4-hour time frame:
Gold (XAU/USD) 4-hour Chart by TradingView
Less dovish Fed expectations towards the latter part of December last year propped up the U.S. dollar while also weighing on gold prices, forcing the precious metal to retreat.
Still, the ascending triangle support on its 4-hour time frame appears to have held as a floor, taking XAU/USD back up to the area of interest around the $2,600 region.
Will this keep holding as resistance or can gold make another test of the triangle top?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on gold and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Moving averages are oscillating for the time being to reflect rangebound conditions, barely offering any strong directional clues. Price seems to be finding support at these technical indicators, though, so a bounce could keep gold on a bullish trajectory.
In this case, look out for a potential move past R1 ($2,671.35) and onto the triangle resistance and R2 ($2,702.99). Keep your eyes peeled for long green candlesticks reflecting sustained upside pressure that could even result in a bullish triangle break!
On the other hand, a dip below the area of interest could send gold back to the triangle support near S1 ($2,602.13) or even for a breakdown to the next bearish levels at S2 ($2,564.55) then S3 ($2,532.91).
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!
