XAUUSD Chart Pattern 28/08/14

FX:XAUUSD   Gold Spot / U.S. Dollar
249 0 2
Gold             price chart formed a Triangle pattern . This tells us that the market is in a consolidation period where the prices are inside an area like a range. Triangle patterns are traded by breakouts. The breakout will tell us where the market wants to go and when that happens, that would be the time we'd put our positions.

The Triangle formed when the prices made Lower Highs and Higher Lows as can be seen in the chart. If the breakout happens, that's where we want to place our trade. Of course, there are two possible ways that this breakout could happen, it's either above or below the triangle. If it's above, we buy, and if it's below, we sell. Although it is worth mentioning that the previous trend before this consolidation happened is Down as can be seen in the upper left part of the chart. So we might want to look for a breakout below for the continuation of the trend. This will not always be the case because a reversal of the trend might occur.

After the breakout, it is logical to take profit at the horizontal support/resistance level indicated in the chart because the price will struggle at those levels and may form a retracement before continuing.

As of now, there is no trade here for me until the breakout.
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