Gold has been consolidating in a triangle for over a month now as you can see in the 4H chart.
The moving averages clustered, reflecting a directionless market. As the 5/27 European session got underway, traders pushed down gold price from around 1295 to about 1283 by 7:00AM ET.
As we get started with the US session, traders will be seeing a breakdown of the triangle, which opens up the 1274 then 1268.50 support pivots in the very short-term.
The daily chart shows that the market has been bearish prior to the formation of the triangle pattern. The breakdown can extend this bearish trend below the triangle low of 1268.50, towards the 1261 level, 61.8% retracement.
Further downside risk can be confirmed if a subsequent pullback fails to push above 1300. In the daily chart, you can see that if price stays south of 1300, it will keep the moving averages above, which is a bearish sign.
A break above 1300 however keeps away the bearish outlook, and puts the focus on the triangle high around 1330.
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Earlier: GBP/JPY in a Bullish Continuation Breakout;172.74 in Sight