Gold – Broken higher from a triangle pattern to complete a short term bottom

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Gold – Broken higher from a triangle pattern to complete a short term bottom.

Weekly:  The sideways consolidation continued although the market managed to post a significant low at 1160. Levels close to the 78.6% pullback level of 1174 found buyers. The trend of higher lows is located at 1180. Price action looks to be forming a bottom.

Daily: Broken out of the triangle formation to the upside. The bullish engulfing candle on the daily chart is positive for sentiment. A mild correction has been posted from yesterday’s high, this is seen as a retest of the breakout level. Our bias remains bullish and further upside is expected to target resistance at 1268.

Intraday (4-hour): Support held at 1212 and overnight buying pressure has resulted in a swing higher. We have a 50% Fibonacci pullback level of 1213 from 1182 to 1243. Further upside is expected although we prefer to set longs at our bespoke support levels at 1220, resulting in improved risk/reward

Action: We look to Buy at 1220

Stop: 1207

Target: 1268 and 1300

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