XAUUSD - Descending broadening wedge bullish breakout

22. Mai 2018

A few days back I posted analysis on a bullish reversal flag pattern that had formed in gold. At the time I said to be watching to see if price would stay broken out or if bears while push is back down inside the pattern. Price did fall back inside the pattern, fall down to make new lower lows and then staged a very impressive V shaped price reversal. This recent price action caused a descending broadening triangle to form, which is a bullish pattern. Price has already broken out of this pattern so just as before will be watching if this hold and price moves higher in the coming days. While recent price action has been bearish also keep in mind that gold is sitting on top of some major support levels which means we could see gold pop back up higher yet again. The goal will be to see if this is simply a retracement before the next leg lower or if there will be a more significant price reversal.

I have got neutral/long on goal through short puts on SPY. This type of strategy is profitable if price moves higher, side-ways or even slightly lower. This type of trade would only be a losing trade if price moved lower in a major way which I see as the least likely scenario right now.