As we inch towards the next development in the Greek debt saga, gold looks like a chart to have on your active watch list for the next few days.
Like most risk markets, gold has rallied significantly since the ECB conducted its monetary easing via loans the European banks in December.
The corrective downtrend since the peak on 3 Feb has formed into a channel or flag which is a classic continuation pattern. Price is also testing the support of the 20 day moving average (green line).
A standard strategy for flag formations is to buy if price breaks through the top of the pattern. In this case a break through the flag resistance may also represent rejection of the moving average support.
On a daily chart like this many trades would apply a filter to the break, perhaps waiting for price to clear the flag resistance by $10 per ounce before entering.
If we get a set up I'll post a follow up blog with some thoughts on approaches to exit strategy ( stop loss and profit objectives)