Long

#XAUUSD #GLD - Falling wedge forming in daily #Gold chart

Updated

Gold has fallen below a strong rising diagonal support line; which for many spells doom. However there may be a saving grace with a bullish (reversal signalling) falling wedge in the process of forming on the Daily. They can sometimes break out after only 4 touches; however if it does drop lower for one more touch (point '5') of the lower support first then we can be quite confident of the reversal playing out.

Trade either point '5' touch with a stop if that lower line is ever breached; or else can enter on upper breakout and/or backtest.

Note

Getting close to '5' now, and volume staying low too which further validates the pattern. If/when it touches that lower support again I'd expect volume to pick up a bit as it bounces up.

Note

In the last day this had breached the lower line temporarily, but bounced back inside the wedge. There are two schools of thought here:
(1) Wedges can still be valid if only the candle wicks on your chosen timescale are outside of the lines
(2) The pattern is strictly defined by the extremity of the candles, including the wicks

I generally subscribe to (2), so I personally won't be trading this any more; but having said that it will be interesting to see what happens the next few days...

withoutwings

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