In the long-term, gold is still on the positive side of the market though. The price is locked inside of the wedge formation, which is promoting the breakout to the upside. Especially as long as we stay above the major support on the 1380 USD/oz. In the shorter term, situation here is negative. The price bounced from the 1480 USD/oz resistance and went lower. We are also inside of the smaller flag formation, which is promoting the breakout to the downside. We can conclude it this way: as long as we are inside of the wedge pattern, the sentiment is negative but the breakout to the upside, will bring us a long-term buy signal.
Second instrument is GBPJPY, where the price broke the upper line of the rectangle, giving us a nice buy signal. This sentiment is additionally strengthened by the bullish wedge formation, from the first days of December. Recently, GBPJPY is very respectful towards the technical patterns, we had this wedge and the rectangle but also a beautiful flag in September and October, which resulted with a new bullish wave.
Now USDJPY, which starts this week on the back foot. The attack on the 109 resistance was unsuccessful and the price reversed creating a triple top formation. We can consider it also as a false breakout and both patterns are promoting a further slide. Chances for a bigger drop here are currently very high.
This article was originally posted on FX Empire
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