Gold: Bullish Bat Pattern Analysis 1H (Apr. 20)

X FORCE GLOBAL ANALYSIS:

Gold has shown a corrective trend for the past few days, after creating a lower high. It has broken out of the descending parallel channel, but has not been able to fuel a bullish breakout. In this analysis, however, we look at a potential bullish bat pattern that we have spotted on the hourly chart for Gold.

Bullish Evidence

- The bat pattern market strategy like any other harmonic pattern is a four-leg reversal pattern that follows specific Fibonacci ratios. A proper Bat pattern needs to fulfill the following three Fibonacci rules:
- AB= minimum 38.2% and maximum 50% Fibonacci retracement of XA leg;
- BC= minimum 38.2% and maximum 88.6% Fibonacci retracement of AB leg;
- CD= 88.6% Fibonacci retracement of XA leg or between 1.618% – 2.618 Fibonacci extension of AB leg;
- We are currently close to the ascending trend line support on the daily

What We Believe

A bounce before a breakout is anticipated at current levels, as the bat pattern has completed its formation. However, a break down below the ascending trend line support, continuing its bearish trend would negate the bullish bat pattern.

Trade Safe.