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Gold - Stalking the Falling Wedge

Late August was a time of interest price action in gold as it fell to a new low on the year and multi-year low at 1071. It then consolidated and eventually pulled back up to about 1170. So far in September, gold price has been sliding in the form of a falling wedge pattern.

Gold (XAU/USD) 4H Chart 9/14


(click to enlarge)

The 4H chart shows gold price action within this falling wedge. The moving averages are sideways, which reflect a sideways market, so the fact that price is under them does not necessarily mean price is bearish. It is in the short-term, but the medium-term outlook is flat.

Now, I might even propose a slight bullish bias in the short-term this week. Why?
1) A falling wedge is usually a sign of a weak bearish market, especially if there was a prevailing bullish one. Here, there was a prevailing bullish swing, although the overall mode has been bearish in 2015. Thus, if we do anticipate the bullish scenario, we should limit the outlook.
2) There is a bullish divergence between price and the 4H RSI. If the market is clearly bearish, this bullish divergence should not matter. But in a flatter market, it could be viable evidence of a pending bullish swing. 
3) The 1100 psychological level could provide support at least in the very short-term.

I think the first key resistance will be around 1120. Sure, a break above the falling wedge could be an early bullish signal, but let's not jump the gun. A break above 1120 can afford us more confidence to the upside. A hold above 1110 on a pullback can also add to the bullish scenario.