trend line breakout
The trendline appears to be recognized by the market, as gold is currently scheduled to close at or near the trendline resistance. This is the upper bound of a downtrend channel. Today's high was above the line, but signs of further trend strength are needed to indicate a near-term upside potential. A subsequent breakout above 2,698 not only indicates a continuation of the short-term trend, but also provides a second breakout signal from the descending channel.
bullish weekly pattern
This week, the long-term weekly chart (not shown) is bullish as gold is expected to break through a three-week high and close the week at a seven-week high. Additionally, this week is expected to end on a strong note, with gold likely to finish in the top third of this week's price range. This is a sign of strength that may portend continued strengthening.
Reach the key pivot area at the top of the channel
Today's low of 2,661 is short-term support, while the 50-day moving average is at 2,649 and the 20-day moving average is at 2,637. Potential support near the recent mid-swing low of 2,615 is important as it is a higher swing low. However, given its position in the price pattern, it is not as important as the support at swing low 2,596 from late last year. Since the 2,615 swing, gold's lows have been rising for four days.
However, the previous rally from November's swing low of 2,537 peaked five days later. It is still possible that we will see time symmetry, with the current rally making new trend highs before stalling. This will complete a five-day streak of higher daily highs and higher lows.
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