XAU/USD (Gold) Finds Itself in an Ascending Parallel Channel

In this idea I will do a full technical analysis on gold on the 1H and explain why I give a bullish (long) trade advice, and also discuss an alternative bearish scenario.

We can see that the upper resistance line of this ascending channel on gold is definitely much weaker than its support line.

With two break-outs the resistance had cases where it didn't hold well. I keep this line on the chart as both break-outs got rejected, but we have to keep this behavior in mind so you don't get stopped out on when you want to enter a short.

This lower support line of the ascending channel is very strong so far and has at least 5 confirmed touches.

Now that the price is at the middle line of the channel, I see two scenarios play out. Either it breaks upwards and we can enter a long towards the upper resistance of the channel, or it breaks downwards and we can short until the lower strong support line.

In general, because gold is trending upwards recently I would advice to have a bullish bias here and suggest the most likely scenario of a bullish continuation

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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!