XAU/USD 1H Chart: Descending Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
After stopping 13 dollars short of the upper bound of the 11-month rising wedge, the price started forming a descending triangle, a pattern that portends a sell-off. The bearish outlook will be confirmed once the rate closes beneath the key support area between 1,278.50 and 1,276.50. The target will then be the lower bound of the wedge at 1,225.

However, being short right now may be risky. First, because of the formidable demand area circa 1,282 dollars, created by the daily S1 and 200-hour SMA. At the same time, a majority of the technical indicators is bullish, and the precious metal is oversold, being that 61% of open positions are short.
© Dukascopy Bank SA
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