Another Descending Triangle Puts Further Pressure on Gold Price

Summary:

Gold price bearish action continues as it still has room to travel until the measured move of a descending triangle. Is gold leading to a higher USD?

Gold price continues its downside trend after the bearish break seen this week. So far, the slide in gold failed to attract USD strength. It did so on Monday when gold broke support, but then the USD and the gold price diverged.

While the EURUSD and Bitcoin moved to higher levels, gold continued to decline. Judging by the descending triangle seen below, there is still plenty of room to go until the price reaches the measured move. Speaking of the measured move, that is the minimum distance the price of gold should travel – it only shows a target that confirms the reversal.

Gold Descending Triangle

If gold leads the price action in the USD, then the fiat pairs should follow. For example, it is difficult to believe that the AUDUSD pair can remain above 0.73 while gold falls below $1,700. On the other hand, we have seen even more strange things happening in 2020, so nothing should be ruled out.

Bears may want to stay on the short side until the gold reaches the measured move. At that point, the ideal thing to do is to book half of the profits and set the stop loss at break-even while trailing it with each step lower in the price of gold.