Is gold preparing for a break higher?
Maybe, but XAUUSD bulls still need to do som
If you watched that video, you know about the falling wedge pattern.
The upper level extends from the year-to-date high while support starts with the August 13 low.
Given the massive rally that unfolded earlier this year, the pattern below looks relatively constructive, in my opinion.
In other words, it could very well be a continuation pattern.
That’s my base case for XAUUSD as long as the market is above wedge support, which could be as low as 1420.
But ideally, I would like to see buyers keep the price above 1450 on a daily closing basis.
Remember that I use New York close charts so that each 24-hour session opens and closes at 5 pm EST.
Go here to get access to the same Forex charts I use.
The next leg higher for XAUUSD probably won’t materialize until buyers break wedge resistance near 1480.
We saw just how significant this wedge resistance was last Thursday when XAUUSD sold off from the level.
If we continue to see the pair hover just below resistance, I’d say a breakout isn’t far away.
But as always, the market will have the final say.
So until XAUUSD closes the day above the 1480 region, the consolidation that we’ve seen since mid-August will remain intact.
A close above resistance would expose 1515 and perhaps the year-to-date high at 1550.
Be sure to watch Saturday’s video for more details.