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XAUUSD (gold) has been trending higher since late 2015.
Even the aggressive March selloff didn’t do much technical damage as it was mostly a liquidity-driven event.
There was even a buying opportunity as XAUUSD recovered from the March liquidation.
I mentioned several opportunities in the member’s area, starting with the break above 1615 on April 6th.
Just last week, gold presented us with another opportunity to get long.
The wedge pattern that formed between mid-April and May illustrated the type of coiling action that often precedes a breakout.
Members and I were anticipating a break higher on May 13th.
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Sure enough, we got the first close above wedge resistance on the 14th.
The first target following the breakout was the 1740/50 region.
It took the XAUUSD just three days to reach that area, and gold even took out 1750 on the intraday charts.
However, as you may know, the daily close at 5 pm EST is key.
Notice how XAUUSD never did close the day above the April 14th high at 1747.
Since then, we’ve seen gold consolidate once more.
But just like last time, the market is carving a possible continuation pattern, this time in the form of a descending channel.
The intersection of channel support and former wedge resistance creates a confluence of support near 1700.
That’s going to be a must-hold area for buyers next week.
If XAUUSD breaks channel resistance near 1740 instead of testing 1700, a run at 1750 and 1800 seems likely.
Either way, I continue to favor buying gold on dips or following confirmed breaks above key resistance.