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With consolidation trading patterns the xauusd market can move in any direction after a xauusd price breakout. Consolidation xauusd chart patterns are used to spot break-out patterns in gold charts. There are two different types of consolidation chart patterns that form on xauusd charts:

• Symmetric Triangles - Consolidation Patterns
• Rectangle Patterns - Range Gold Chart Patterns

Consolidation Chart Patterns

Symmetrical triangles are xauusd patterns with converging trendlines that form a xauusd price consolidation period that signals there is going to be a xauusd price breakout in one direction after this xauusd chart pattern breaks out in one direction. The buy signal from a consolidation triangle is the upside xauusd price break, while a downside xauusd price break is a sell signal. Ideally, a the xauusd price breaks out from a consolidation chart pattern prior to reaching the apex of the triangle.

Gold Trend lines gold trend lines can be drawn connecting the lows & highs of the consolidation pattern for the xauusd price, the trend lines formed are consolidation and converge to form an apex - consolidation triangle pattern. A xauusd price break out should occur somewhere between 60% - 80% into the triangle consolidation pattern. An early or late gold break out is more prone to gold trading whipsaws, and therefore less reliable. After a xauusd price breakout to one side the apex of the consolidation triangle forms the support and resistance levels for the xauusd price. Gold price that has broken out of the consolidation chart pattern should not retrace past the apex. The apex is used as a stop loss setting level for the open xauusd trades placed after a xauusd price breakout.

When consolidation gold patterns form we say that the gold market is taking a break before deciding the next direction to take - this also signals an impending xauusd price breakout - XAUUSD Breakout Technical Trading Indicator - Gold Indicator To Confirm Breakout.

These gold consolidation patterns form when there is a tug of war between buyers & sellers & the xauusd market can't decide which way to move.

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However, this consolidation pattern can not go on forever - the gold chart example below shows how the consolidation pattern eventually had a xauusd price break out and moved in one direction.

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After xauusd price consolidating, If xauusd price breaks-out the upper line we open buy gold trades, if xauusd price breaks-out the lower line we open sell xauusd trades.

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A rectangle consolidation pattern is a trading range with narrow xauusd price action that forms a consolidation period in gold trading market. The gold trading range is defined by 2 parallel gold trend lines which are horizontal and these indicate the presence of support and resistance levels at this particular area. Range consolidation chart pattern is drawn on a gold trading chart using a rectangle, therefore, the name rectangle trading pattern.

For this gold consolidation chart pattern, xauusd price forms a series of highs & lows that can be connected with horizontal gold trend lines that are parallel to each other. Range consolidation chart pattern forms over an extended period of time giving this xauusd chart pattern its rectangle shape.

A gold breakout of xauusd price action from this rectangle consolidation chart pattern forms when either of the horizontal line is penetrated & the gold trading range of this rectangle gold pattern is broken. An up side xauusd price break out is a buy signal. A downside xauusd price break-out is a sell signal.

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Gold Price Breaks Out of rectangle consolidation range after a period of time & price continues to move upward after an upward xauusd price breakout.

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