Commodity Blog

Gold has been in trouble in the past few years but was attempting to bounce since the start of this year. Prices were moving up both in short and medium term. The short-term rally resulted in an ascending channel formation on the 4-hour chart. Yet the rally does not look that strong, and there is a high chance that bullion will fall back, being it a short-term correction or a longer-term reversal of the trend. So what traders could do if a downside breakout indeed occurs?

The potential targets are shown on the present chart. The yellow lines show the ascending channel itself. The cyan line situated below the channel (namely, 10 percent of the channel’s width below the channel) and suggests an entry point for short positions. The green line suggests the profit-taking objective for those traders who would decide to make bearish bets on gold.

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 oil, please feel free to reply below.