Gold points lower as bearish descending triangle triggered

There has now been a clear trigger of a bearish descending triangle formation in Gold (XAU/USD), as can be seen in the monthly chart below. Initially, there was a false breakout last November (dropped below $1,180.20), and another test of support of the pattern in March of this year. Each time Gold managed to rally to some degree before hitting resistance and forming a lower swing low, reflecting underlying selling pressure. What’s being seen now is a classic continuation of a long-term downtrend.

The odds now favor an eventual decline to at least approximately $926.80, which is the measuring objective derived from the descending triangle.

www.marketstoday.net

Other price levels to watch for potential support include:
• $1,047.6: most recent ABCD or measured move completion
• $1,023.6: 127.2% Fibonacci extension of the most recent upswing (begun from November low)
• $1,032 – $985: top portion of previous resistance zone from 2008/2009
• $946.9: 78.6% Fibonacci retracement (uptrend from $681.75 low)
• $926.8: Descending Triangle target
• $889.5: 61.8% Fibonacci retracement of very long-term uptrend (from $251.95 1999 low)
• $865.4: previous support area from 2008/2009

Won't your trader friends like this?
Bruce Powers, CMT
About the Author
Bruce Powers, CMT, has over 20 years experience in the financial markets. Previously, he was President at WideVision, a Dubai based FinTech and IT services company, which published MarketsToday.net/en/, and where he also was Chief Technical Analyst. For the past eight years Bruce has written a weekly column on the UAE stock markets titled \'On the Line\' for the Gulf News newspaper, and has appeared numerous times as a guest on TV business shows. Bruce is a Chartered Market Technician (CMT) and until recently served as Co-Chair of the CMT Association Dubai chapter, which he Co-founded.

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