Continuation Chart Patterns
When these continuation trading patterns are formed they confirm that the current xauusd trend is going to continue moving in the same direction.
These patterns are used by traders to identify halfway points of the trend, this is because they form at the halfway point of a trend.
There are four types:
- Ascending triangle
- Descending triangle
- Bull flag/pennant
- Bear flag/pennant
Ascending Triangle
The ascending triangle is formed in an up xauusd trend and it shows that the upward direction of the xauusd market is going to continue.
It shows that there is a resistance level that the buyers keep pushing each time moving it higher, and once it breaks gold trading price will continue moving upward.
The overhead resistance temporarily prevents the gold market from advancing higher, while the rising xauusd trend line beneath the pattern signals that buyers are still present. An upside penetration of the upper line is a technical buy signal for a market breaking out from an ascending triangle.
Found within a XAUUSD Trading upward trend, the ascending triangle forms as a consolidation period within the up xauusd trend and indicates upside continuation will follow.
The market formed an ascending triangle during its up xauusd trend which led to upside continuation. The buy point is when price clears the upper sloping line and the xauusd market continues moving upwards.
Descending Triangle
The descending triangle is formed in a down xauusd trend and it shows that the downward direction of gold trading price movement is going to continue.
It shows that there is a support level that the sellers keep pushing each time moving it lower, and once it breaks gold trading price will continue to move downwards.
The support temporarily prevents the xauusd market from declining, while the descending sloping line above the pattern signals that sellers are still present. A downside penetration of the lower line is a technical sell signal for a market breaking down from a descending triangle, and this indicates selling will follow.
Found within a XAUUSD Trading downward trend, the descending triangle forms as a consolidation period within the down xauusd trend and indicates downside continuation will follow.
The market formed a descending triangle during its down xauusd trend which led to further selling and continuation of the downward gold trend. The technical sell signal is when price breaks the lower horizontal sloping line as selling resumes to push the xauusd market lower.
Bull Flag/Pennant
This xauusd pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support and resistance for the gold trading price until the gold price breaks out. In general, the flag will not be formed perfectly flat but it will be sloping.
The bull flag is found within a XAUUSD Trading upward trend. In this continuation pattern where the xauusd market retraces slightly, it is therefore a slight retracement with narrow gold trading price action that has a slight downward tilt. The technical buy point is when price penetrates the upper line of the flag. The flag portion has highs and lows which can be connected by small lines which are parallel, giving it what looks like a small channel.
The pennant occurs at halfway point of a bullish upward xauusd trend and after a breakout a similar move equal to the height of the flagpole is expected.
The bull pennant above was just a resting period as the xauusd market gathered strength to break out and move higher. The continuation signal was confirmed as the upper line was broken to the upside.
Bear Flag/Pennant
This flag is found in a XAUUSD Trading downward trend. The bear flag is a continuation pattern where the price retraces slightly with a narrow gold trading price action that has a slight upward tilt. The technical sell point is when price penetrates the lower line of the inverted flag. The pennant portion has highs and lows which can be connected by small lines which are parallel, giving it what looks like a small channel.
The bear pennant above was just a resting period for the xauusd market prior to more selling. The continuation signal was confirmed as the lower line was broken to the downside.
