After touching the descending trend line on daily chart from 1375.11 (2016 high) to 1337.28, XAUUSD started a bearish movement from 1295.44. Now the fall
After touching the descending trend line on daily chart from 1375.11 (2016 high) to 1337.28, XAUUSD started a bearish movement from 1295.44. Now the fall extended to as low as 1214.19, facing the support of the rising trend line from 1180.51 to 1194.94.
Let’s look into the 4-hour chart. The XAUUSD pair stays in a descending price channel which is acting as resistance at the top line of the channel.
On the upside, a clear break out of the top line of the channel (now at 1239) will indicate that the short term downtrend is complete. This could trigger a correction for the downtrend and the target would be at 1253 – 1263 area.
Attention should be paid to 1194.94 key support. A breakdown below this level will confirm that the whole uptrend from 1122.56 had completed at 1295.44 already.
XAUUSD is forming a triangle pattern on weekly chart. A breakdown below 1194.94 key support could trigger a bearish movement toward the lower line of the pattern, now at 1150 area.
support levels:
• The ascending trend line from 1180.51 to 1194.94, now at 1215.
• The key support 1194.94.
• The lower line of the triangle pattern on weekly chart, now at 1150 area.
Resistance levels: The top line of the descending price Chanel on 4-hour chart, now at 1239, followed by 1253 and 1263.
This article is written by Franco Shao, a senior analyst at ForexCycle.