At the intersection of multiple indicators, gold found buyers on Friday as it surged to a five-day high of $3,355 and a test of previous support as resistance. The bottom trendline of a pennant formation (dotted) and the point where the 20-Day and 50-Day MAs intersect, now around $3,342, are highlighted as resistance zones.
A pennant pattern breakdown on Monday caused the price to rise $3,268 from Wednesday’s swing low. The countertrend rally today shown power by surpassing the possible resistance zone and reaching a four-day high of $3,345. A daily closing above $3,342 today would validate the breakout’s power.
The pennant formation would be restored for gold if there was a clear and persistent breakout above today’s high. The moving averages would thus be a possible area of support. The pennant pattern might be widening its footprint as consolidation continues if this scenario materializes and momentum remains modest.
