- Gold's 15-minute chart shows a rising wedge pattern.
- A breakdown would open the doors to a re-test of Tuesday's low.
Gold's recovery from Tuesday's low of $1,726 to $1,750 has taken the shape of a rising wedge pattern on the 15-minute chart.
A rising wedge comprises converging trendlines connecting higher highs and higher lows. The converging nature of trendlines is indicative of buyer exhaustion. Hence, a breakdown is considered a sign of trend change and often leads a price drop to the apex or starting point of the wedge.
At press time, gold is trading at $1,748 per ounce and the support of the rising wedge is located at $1,743. A breakdown, if confirmed, would open the doors to a re-test of $1,726. Alternatively, acceptance above $1,750 would shift the focus to the recent highs near $1,765.
A bullish scenario looks likely as Tuesday's green candle engulfed the body of Monday's inverted bearish hammer candle, weakening the case for an extended pullback.
XAU/USD 15-min chart
Trend: Bearish below $1,743
- R3 1775.42
- R2 1761.72
- R1 1753.37
- PP 1739.67
- S1 1731.32
- S2 1717.62
- S3 1709.27
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