The XAU/USD will need to break above the resistance trend line (red) before a larger bullish breakout and an uptrend continuation can be confirmed (green check). The bullish outlook remains valid as long as price stays above the support (blue) and bottom of wave 2 (green) but price could make a retracement if a wave 1 (orange) pattern develops.
The XAU/USD seems to have completed a wave 4 (dark red) after bouncing at the 50% Fibonacci level of wave 4 vs 3. A break below the 50% Fib invalidates (red x) the wave 4 whereas a bullish breakout confirms (green check) a push higher towards the Fibonacci targets. The chart looks like an ascending wedge, which usually breaks up.
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This article was originally posted on FX Empire
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