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Gold in Ascending Channel. What to Do in Case of Downside Breakout?

October 18, 2015 at 14:43 by Vladimir Vyun

Gold has bottomed out in July and started a rally in August, forming an ascending channel in the process. This chart pattern is bullish by itself, yet it does not necessarily indicate a trend reversal after the long-term downtrend, but possibly just a short-term correction. And even if the metal has indeed reversed its bearish trend, prices usually do not move in a straight line for long. Therefore, it is prudent to be ready in case of a downside breakout. The present chart suggests the possible course of actions.

On the chart, the channel itself is shown by the yellow lines. The cyan line indicates the level to enter short positions in case of a breakout to the downside. The green line offers the profit-taking objective.

Click the image to enlarge it to a full-size screenshot:

You can download the MetaTrader 4 chart template for this pattern.

If you have any questions or comments regarding this chart pattern for copper, please feel free to reply below.

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