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Daily Market Analysis and Forex News
XAUUSD, Calm before the Storm?
![XAUUSD, Calm before the Storm?](/s3-static/2024-06/shutterstock_462191791.jpg)
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Gold is in a triangle pattern
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Key levels of interest are $2346.50 and $2304.00
XAUUSD on a 4-hour chart has coiled into a pennant and is primed for a breakout.
A pennant is a short-term consolidation pattern with converging trend lines.
This pause came after experiencing an almost 4% price drop on June 7, 2024.
According to Thomas Bulkowski's book, "The Encyclopedia of Chart Patterns", pennants typically occur 55% to 57% of the way along a trend, suggesting the possibility of further downward movement for gold.
As of now, gold bulls (those looking to see a gold rally) are testing the upper trendline of the chart pattern.
The shortfall within the pattern may be indicative of the near-term breakout direction.
This upward surge from the shortfall to the upper bound trendline of the pennant followed the release of weaker than expected retail sales data.
On a breakout of the triangle, gold bulls may have to overcome the trend line resistance (drawn from May 20th high at $2450.03 and tested on June 7th, 2024).
Key levels to watch for gold bulls are:
- $2346.50 – The downward sloping trend line drawn from over May 20th (1700 points)
- $2360.00 – A significant price level
- $2386.84 – The start of the “flagpole” leading into the pennant
On the other hand, gold bears may pay attention to the following interest levels.
- 2304.00 – the price around the lower band of the pennant
- 2275.21 – A significant price level
Caution: With the US markets closed this Wednesday 19th, choppy price action may be on the cards for today's session.
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