XAUUSD's (Gold) descending triangle

in xauusd •  7 years ago 

The 4hr tf chart of XAUUSD (Gold) shows that price has been meandering ever since Gold made a high of ~$1,365.95 on January 25, 2018.
The chart pattern that best describes the meandering price action of XAUUSD (Gold) since January 25, 2018 is a descending triangle. This chart pattern ideally has bearish implications, but not all the time. This implies that a breakout upwards for XAUUSD is also possible.

In either case, a downward breakout outside this descending triangle can see price of XAUUSD reach ~$1,247.95. This is calculated based on a downward projection of the width of the chart pattern and subtracting it from the breakout point (breakout in this case is ~$1306.95)

Monday Gold.png

Width of the descending triangle is shown by the light blue line and is calculated by taking the difference between the high and low of price (i.e. $1,365.95 - $1,306.95 = $59)

In the case of an upside breakout, the width of the descending triangle ($59) can be added to the breakout point above the triangle. In this analysis, I used the breakout price of ~$1357.73.
Projection of termination of XAUUSD for a breakout above the triangle therefore = $59 + $1357.73 = $1,416.73
P.S. Analysis was carried out using FXCM’s data so projections may vary slightly depending on your broker.

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