Gold is entering an increasingly interesting phase. After several weeks of correction from the highs, selling pressure is no longer extending as easily as before, while price has gradually compressed into a falling wedge. More importantly, XAUUSD has already pushed above the upper boundary of the pattern. This is not enough to declare that the bullish trend has returned, but it does suggest that sellers are no longer in complete control of the market.
Rather than accelerating immediately after the breakout, XAUUSD is now pulling back toward the 4,305–4,320 area and testing the newly established base. To me, this is the more important part of the setup. If this area continues to absorb selling pressure and price can reclaim 4,360–4,400, the previous breakout will gain more credibility and the market could begin transitioning from correction into recovery.
What keeps me cautious is that the high U.S. interest-rate environment continues to put pressure on gold. For that reason, I do not want to buy simply because a falling wedge has appeared. I want to see buyers prove that the breakout can hold before expecting a larger move higher.
If 4,305 continues to be defended, my preferred scenario is a bullish recovery, first reclaiming the recent short-term highs before extending toward 4,500. On the other hand, losing 4,305 would increase the risk that the current breakout turns into a false break and would force me to reassess the entire bullish thesis.
Rather than accelerating immediately after the breakout, XAUUSD is now pulling back toward the 4,305–4,320 area and testing the newly established base. To me, this is the more important part of the setup. If this area continues to absorb selling pressure and price can reclaim 4,360–4,400, the previous breakout will gain more credibility and the market could begin transitioning from correction into recovery.
What keeps me cautious is that the high U.S. interest-rate environment continues to put pressure on gold. For that reason, I do not want to buy simply because a falling wedge has appeared. I want to see buyers prove that the breakout can hold before expecting a larger move higher.
If 4,305 continues to be defended, my preferred scenario is a bullish recovery, first reclaiming the recent short-term highs before extending toward 4,500. On the other hand, losing 4,305 would increase the risk that the current breakout turns into a false break and would force me to reassess the entire bullish thesis.
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Free daily Forex, Gold, Crypto setups with reasoning
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Free daily Forex, Gold, Crypto setups with reasoning
Entry, invalidation, targets and reviews
👉 Join free: t.me/+-HowPr1J4k03NGY1
Educational only. Not financial advice. Trading involves risk.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.