A "Cup and Handle" is a bullish continuation pattern in an uptrend.
The greatest factor working against this current gold chart as a cup and handle is that it appears during a consolidation pattern in a broader uptrend.
The 'cup' is best shaped as a "U" and the broader the bottom the better.
The 'handle' is a retracement when the right side of the 'cup' reaches its prior highs. The handle often resembles a bullish pennant.
The retracement usually does not exceed 30% of the advance of the cup to its second high, but can go as deep as 50% in a volatile market.
The cup and handle formation will not be activated until the price of gold rallies about the 'rim' of the cup which is at 1790.
If this correction exceeds 50% then we must consider that gold is in a broad trading range.
