As gold traders, we've been closely monitoring the consolidation pattern forming on the daily timeframe, denoted by a narrowing price channel that signifies indecision in the market. The precious metal has been hovering around the $2038 resistance level, unable to push through it.
The technical structure on the chart suggests that gold is at a critical juncture. The intermediate resistance around $2038 is proving to be a tough barrier to break, although it did break it last week but only for a short period of time as it couldn’t hold the level after Fed’s statement. The recent approach towards this resistance coincides with a bullish wedge pattern on the daily chart, often indicative of potential upward momentum if a breakout occurs.
Our stance in this scenario is to maintain a balanced perspective. While the bullish wedge may signal an upcoming breakout to the upside, we are prepared for any outcome. A confirmed move above the $2038 resistance could open the path towards testing the $2060 level. Conversely, a rejection at resistance and a breach below the channel's support might see a retest of lower support zones.
The current environment suggests a strategy of waiting for a break and retest for confirmation of direction. Unless the price continues to move sideways. However, we advise caution and recommend waiting for a clear signal, such as a decisive candle close outside of the current price channel, before establishing new positions in the market.
The technical structure on the chart suggests that gold is at a critical juncture. The intermediate resistance around $2038 is proving to be a tough barrier to break, although it did break it last week but only for a short period of time as it couldn’t hold the level after Fed’s statement. The recent approach towards this resistance coincides with a bullish wedge pattern on the daily chart, often indicative of potential upward momentum if a breakout occurs.
Our stance in this scenario is to maintain a balanced perspective. While the bullish wedge may signal an upcoming breakout to the upside, we are prepared for any outcome. A confirmed move above the $2038 resistance could open the path towards testing the $2060 level. Conversely, a rejection at resistance and a breach below the channel's support might see a retest of lower support zones.
The current environment suggests a strategy of waiting for a break and retest for confirmation of direction. Unless the price continues to move sideways. However, we advise caution and recommend waiting for a clear signal, such as a decisive candle close outside of the current price channel, before establishing new positions in the market.