GOLD BULLS - REJOICE, WE'RE GOING HIGHER
Gold has continued to move higher during this last week. Since August 2018, the price has been trapped within a parallel channel before breaking the resistance of the channel in the last week of December. Following the break, the price has been moving higher to the point when it touched $1,326 last week, which represents a 9-month high.
Before that, the price had consolidated within the symmetrical triangle, (the ascending red lines), near the top of the trend, before breaking down. In the perfect manner, it returned to retest the broken channel before continuing higher to test the 78.6% Fibonacci retracement zone.
Such move is a sign of a BULLISH trend. Whenever the price creates a bullish break of a certain pattern - a parallel channel in this case - it usually returns to the same point to retest the old level, but now in the context of a support (the previous resistance).
The lower time frame on the other hand shows signs of fatigue of the bulls. The price had been creating a series of similar highs in the range of $1,323 - $1,325, but without much success to break further higher.
In case of a break of the neck line, the price action will confirm the head and shoulders pattern. This formation is created when the market is preparing to reverse from the current trend, in this case a bullish one. But only to retest a higher low, confirming the bull trend on higher timeframes. The neck line receives additional support from the 23.6% Fibonacci retracement and 100 H1 MA.
Any break above the most recent swing high may push the price further higher. The first target on the upside is $1,365, which represents the 2018 high.
If you appreciate this idea, don't forget to click on the like and follow buttons :)
Before that, the price had consolidated within the symmetrical triangle, (the ascending red lines), near the top of the trend, before breaking down. In the perfect manner, it returned to retest the broken channel before continuing higher to test the 78.6% Fibonacci retracement zone.
Such move is a sign of a BULLISH trend. Whenever the price creates a bullish break of a certain pattern - a parallel channel in this case - it usually returns to the same point to retest the old level, but now in the context of a support (the previous resistance).
The lower time frame on the other hand shows signs of fatigue of the bulls. The price had been creating a series of similar highs in the range of $1,323 - $1,325, but without much success to break further higher.
In case of a break of the neck line, the price action will confirm the head and shoulders pattern. This formation is created when the market is preparing to reverse from the current trend, in this case a bullish one. But only to retest a higher low, confirming the bull trend on higher timeframes. The neck line receives additional support from the 23.6% Fibonacci retracement and 100 H1 MA.
Any break above the most recent swing high may push the price further higher. The first target on the upside is $1,365, which represents the 2018 high.
If you appreciate this idea, don't forget to click on the like and follow buttons :)
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