The XAUUSD has recently found support around 1081 level on August 2015, which is the 50% retracement from the low of September of 1999 to the high of September of 2011. On the daily chart, price has managed to form a falling wedge form which was able to break to the upside. By doing so, it also started the process of forming a symmetric triangle. At the same time, the long-term Guppy GMMA, shows signs of compression and is in the process of turning upwards, however on the weekly timeframe, the long-term GMMA is still spread and pointing down, indicating a bearish bias on the long run.
Despite the break of the falling wedge to the upside, it is expected the price to encounter strong resistance on the upper line of the triangle, which also coincides with a long downtrend line since January 2015. However, if this downtrend line is broken to the upside, price may at least reach the top level of the falling wedge, which also corresponds to 23.6% of the base of the triangle from the point of break. If price closes above the top of the base of the falling wedge, it is likely that we can apply standard triangle breakout rules, with targets at 50%, 76.4% and 100% of the base of the triangle.
On the other hand, if downtrend line holds, price will travel south to test the lower line of the triangle. A break of the triangle to the downside, probably will find resistance again around 1081, which is also the 38.2% base of the triangle from the point of breakout, but if price breaks below this level, standard triangle trading rules apply, with targets at 50%, 76.4% and 100% of the base of the triangle measured from the point of break.
All trades are managed with count back line stoploss after triggered.
In conclusion, short-term bullish sentiment, but bearish bias still in place on the long run.