Chart Art: Classic Chart Patterns on Gold (XAU/USD) and GBP/USD


 Looking for a reversal or a consolidation setup?

Either way, I’ve got you covered with these chart formations on Cable and gold!

Check out these inflection points being tested:

GBP/USD: 1-hour

First up is an update on this neat descending triangle pattern on GBP/USD.

The pair is back down to the bottom of the formation, finding buyers at the 1.1925 support zone. Where to next?

Stochastic is suggesting that we might see another bounce to the top of the triangle, which is right around the 1.2050 minor psychological mark. After all, the oscillator is pulling up from the oversold region to indicate that buyers have the upper hand.

However, moving averages are hinting that bearish pressure is in play. Either this means that resistance levels are more likely to hold than to break or that there’s a chance a triangle breakdown could happen.

If the latter takes place, brace yourselves for a selloff that’s at least the same height as the chart pattern or roughly 300 pips.

Gold (XAU/USD): 1-hour

Is that an inverted head and shoulders pattern I’m seeing?

If so, then this shiny metal might be in for a reversal from its slide!

Gold is still gearing up to test the neckline resistance close to the $1,850 mark, and a break higher could confirm that an uptrend is in the cards.

Technical indicators are looking mixed for now, though. Stochastic is heading north to show that bullish momentum is present, but the oscillator is closing in on the overbought region.

Meanwhile, the 100 SMA is below the 200 SMA to reflect bearish vibes, but the gap between the indicators is narrowing to hint at a potential bullish crossover.

Also note that gold is trading above both moving averages, so these could hold as dynamic support on dips.

If you’re hoping to catch better odds, better wait for the signals to align before jumping in a long position!