Active vs Passive Trade ManagementOne trade can make almost any approach to trade management look good. Tighten a stop beneath developing structure and exit shortly before a reversal, and active management appears to have done its job perfectly. Follow a slower trailing rule through the same move and the additional giveback can suddenly look unnecessary.
Reverse the sequence and the conclusion can change completely. The actively managed position may be stopped during an ordinary pullback, while the passive approach remains in place for the next leg of the trend.
That is why active and passive trade management shouldn't be judged by the outcome of a single position. What matters is whether we can apply an approach consistently across enough trades for its strengths and weaknesses to become meaningful.
Active management
Gold's recent four-hour rally gives us a useful example. For illustration, we can take the breakout from the early-August compression as our hypothetical entry, with the initial stop positioned beneath the structure supporting the setup.
An active approach continues to interpret the market after entry. As Gold pushed higher and established a new area of consolidation, fresh structure had developed well above our original stop. That gave us an opportunity to reassess the risk and move the stop beneath the new range.
Gold four-hour candle chart: Active trade management
Past performance is not a reliable indicator of future results
The attraction is flexibility. Rather than waiting for a predetermined condition, we can respond as the market evolves. Later in the move, Gold stopped making clean progress and developed a downward-sloping consolidation near the highs. The subsequent break lower represented a meaningful deterioration in structure and could have prompted an actively managed exit.
On this particular trade, that would have protected more of the preceding advance than the passive approach we will look at next. But there is a danger in drawing too much from that result.
Look back at the earlier stop adjustment. Gold subsequently pulled back towards the new structure before recovering and beginning another substantial leg higher. A more aggressive decision to tighten risk could easily have taken us out of an otherwise healthy trend.
Active management therefore gives us more opportunities to respond intelligently, but also more opportunities to interfere. Consistency requires us to distinguish between genuinely meaningful changes in the trade and ordinary fluctuations we knew we would encounter when the position was opened.
Passive management
A passive approach shifts more of those decisions to before they are required. Instead of continually interpreting whether each new development warrants action, we establish a rule and accept the consequences of following it.
Using the same Gold trade, we can illustrate this with Supertrend set to 10 and 3. The entry and initial stop remain unchanged, but management then follows a simple predetermined rule: remain in the position until a four-hour candle closes below Supertrend.
Gold four-hour candle chart: Passive trade management
Past performance is not a reliable indicator of future results
During the mid-August pullback, Gold tests the Supertrend area without satisfying that exit condition. There is no decision to make about whether the pullback looks threatening enough to tighten the stop. The rule remains intact and Gold subsequently begins another strong advance.
This is one of the main attractions of passive management. It reduces the number of discretionary decisions made while a position is open, potentially making it easier to tolerate the normal fluctuations that occur within a larger move.
The cost becomes apparent later. When Gold eventually deteriorates from its highs, the passive rule cannot anticipate the reversal or respond to the changing structure. It waits for its predetermined condition, resulting in more of the preceding advance being surrendered before the exit is triggered.
Consistency doesn't mean passive
It would be easy to look at these two charts and conclude that active management handled this particular move better. That misses the more important point.
The very responsiveness that helped near the eventual high could have hurt us during an earlier pullback. Equally, the slower Supertrend rule that surrendered more of the final move was also what prevented short-term fluctuations from repeatedly changing our management decisions.
Passive approaches make consistency relatively straightforward because the conditions for intervention can be defined in advance. Supertrend is only one example. Fixed stop-and-target combinations and other rules-based trailing methods can achieve something similar.
Active management can be just as consistent, but it requires a framework for exercising discretion. Moving a stop because meaningful new structure has developed is very different from moving it simply because a profitable trade has started pulling back. If the criteria change from one position to another, it becomes difficult to know whether the management process is adding value at all.
Judge the process, not the trade
No single chart can tell us whether active or passive management is the better fit for our trading. One trade may reward discretion, while the next punishes the exact same willingness to intervene.
The useful comparison is therefore not which approach captured more of this particular Gold rally, but what each asks of us. Passive management trades responsiveness for greater consistency and fewer decisions. Active management retains greater flexibility, but those additional decisions need to be made within a repeatable framework.
A well-timed exit can always look clever in hindsight. The value of a trade-management process only becomes clearer when the same principles are applied consistently across a meaningful sample of trades.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Education
Why Bond Yields Matter to Every TraderThe bond market is sending a message that is becoming increasingly difficult to ignore. The US 10-year Treasury yield has climbed to around 5%, pushing through its previous peak and back to levels last seen in 2023.
For those of us trading the S&P 500, gold or EUR/USD, it might be tempting to leave the bond market to the bond specialists. But yields feed directly into the environment these markets trade in, affecting equity valuations, the opportunity cost of holding gold and the relative-rate expectations behind currencies.
The useful part isn't trying to predict where bond yields go next. It's understanding what a move in yields means for the markets we actually trade, and knowing that the answer is different for each one.
Start with the yield
The US 10-year gives us a useful starting point. Yields have been trending higher for much of this year, but the latest acceleration has taken them through the previous peak and back to the highs reached in 2023.
Fiscal concerns, persistent inflation pressures and the outlook for government borrowing have all played a role. For our purposes, however, the more useful question is what other markets are doing in response.
US 10-year Treasury yield daily candle chart
Past performance is not a reliable indicator of future results
Bond prices and yields move in opposite directions, so rising yields reflect falling prices and a higher return being demanded by the market. But that doesn't give us a universal risk-off signal. The information yields provide depends on which market we're analysing, what is driving the move and, crucially, how price is responding.
Equities: think discount rate
For equities, one of the main transmission mechanisms is the discount rate. A share price reflects the value investors place on a company's future cash flows, and when longer-term interest rates rise, the rate used to discount those future cash flows also increases. All else being equal, that reduces their value today.
The effect can be particularly relevant for growth companies, where a greater proportion of the valuation may depend on earnings expected further into the future. Rising government bond yields also increase the return available from comparatively lower-risk assets, raising the hurdle equities have to clear.
The mistake is turning that relationship into a simple rule that says rising yields must mean falling share prices.
S&P 500 daily candle chart
Past performance is not a reliable indicator of future results
The current S&P 500 chart shows why. Treasury yields have climbed to multi-year highs, yet the index has remained relatively resilient. Price has pulled back from its recent peak and short-term momentum has softened, but it is only now testing the combination of its previous breakout area and rising 50-day moving average.
If a potential headwind is strengthening but the market refuses to deteriorate significantly, we shouldn't simply assume price must eventually conform to the textbook relationship. Strong economic growth, earnings expectations and risk appetite can all compete with the effect of higher yields.
Instead, we can turn the relationship around and ask how well the equity market is absorbing the rise in yields. Sometimes the response to a headwind tells us more than the headwind itself.
Gold: think real yields
Gold requires a slightly different approach. Unlike government bonds, gold doesn't produce an income stream, so as the return available from interest-bearing assets increases, the opportunity cost of holding a non-yielding asset can rise with it.
Gold daily candle chart
Past performance is not a reliable indicator of future results
Gold has pulled back from its recent swing high and is now testing its rising 50-day moving average, but that price action cannot simply be attributed to the rise in nominal Treasury yields. For gold, real yields can often provide the more useful comparison because they adjust the return available from bonds for expected inflation.
The distinction matters. If nominal yields are rising largely because inflation expectations are increasing, the change in the inflation-adjusted return available from bonds may be much smaller. A rise in real yields creates a more direct increase in the opportunity cost associated with holding gold.
Even then, we shouldn't expect a perfect relationship. The dollar, geopolitical risk, central-bank demand and wider risk appetite can all influence gold at the same time. Yields provide another layer of context rather than a standalone signal.
Currencies: think relative yields
EUR/USD has also weakened as US yields have pushed higher, with the pair extending its recent decline and returning towards its rising 50-day moving average. It would be tempting to connect those two moves directly, but currencies require another adjustment to our framework.
EUR/USD daily candle chart
Past performance is not a reliable indicator of future results
EUR/USD represents the relative value of two currencies, so a move in US yields becomes more useful when compared with what is happening to yields and interest-rate expectations in the euro area.
If US yields rise faster than comparable European yields, the relative return available from dollar-denominated assets can become more attractive. If yields on both sides are moving together, the change in the relative-rate picture may be much smaller.
The same principle applies across FX. Rather than asking whether US yields are simply rising or falling, we want to understand how the rate backdrop is changing relative to the other side of the currency pair and then judge how price responds.
One move, three different questions
Bond yields aren't a shortcut for predicting what equities, gold or currencies will do next. Their value comes from helping us understand the environment in which those markets are trading.
For the S&P 500, we can ask how equities are responding to a changing discount-rate backdrop. For gold, we can focus more closely on real yields and the opportunity cost of holding a non-yielding asset. For EUR/USD, the emphasis shifts towards relative yields and how the US rate backdrop compares with Europe.
The recent move in the US 10-year has made those relationships difficult to ignore, but the framework remains useful long after the current move has played out. Bond yields aren't a trading signal. They are another part of the market helping us understand what our trades are up against.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Brent Crude Compresses After Breaking $100Having broken through $100 with increasing momentum, Brent crude has pressed pause on its recent rally. Two consecutive inside days have formed on the daily chart, while the four-hour picture shows price compressing into an increasingly tight consolidation.
After such a sharp acceleration, the lack of any meaningful pullback is significant. The question now is whether Brent is simply absorbing the recent advance before momentum returns, or whether this compression marks the first stage of a deeper correction.
Momentum has changed gear
The steepening trendlines on the daily chart help put the recent move into context. Each successive phase of the advance from the July low has developed at a faster rate, culminating in the break through the July swing high and $100.
The significance of that acceleration is what happens when the pace inevitably slows. A loss of momentum after such a steep move tells us relatively little on its own. How much ground Brent has to surrender while momentum resets is potentially much more revealing.
So far, the answer is very little. Rather than retracing sharply after the breakout, Brent has produced two consecutive inside days while remaining above the former July swing resistance. The market has stopped accelerating, but there is little evidence yet that the underlying structure has deteriorated with it.
Brent Crude (UKOIL) Daily Candle Chart
Past performance is not a reliable indicator of future results
Compression sharpens the setup
The four-hour chart gives us a more precise way of judging what happens next. The wide ranges accompanying the latest leg higher have disappeared and price is now compressing into a tightening triangle.
The rising 21-period EMA has also caught up with price during the pause. Some of the short-term extension created by the rally is therefore being worked off without requiring a meaningful retracement.
Brent Crude (UKOIL) Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
Simply seeing price leave the triangle will only provide part of the information. A break higher followed by acceptance outside the consolidation would suggest Brent has absorbed the pause without materially damaging its recent momentum. The major resistance zone sitting above the market on the daily chart would then become the next important test.
A downside break would deserve attention, but it would not carry the same significance as losing the structure underneath. Falling out of the four-hour compression would suggest immediate momentum is weakening. Falling back through the former July swing resistance would tell us something more important about whether the recent breakout itself is beginning to fail.
That distinction is what makes the current compression useful. Brent does not need to keep accelerating for the bullish structure to remain intact, but the amount of ground it gives back as momentum cools should tell us plenty about the quality of the move.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
FTSE’s Energy Strength Masks a Weaker PictureThe FTSE 100 has come under pressure over the past couple of weeks, but the headline index only tells part of the story. Strength in heavyweight energy stocks has provided an important cushion while weakness has spread across much of the wider market.
That makes the recent deterioration in the FTSE's short-term structure worth watching. With UK employment and inflation data due ahead of Thursday's Bank of England decision, this week should provide a useful test of whether the wider market can start to rebound.
Short-term structure starts to weaken
The change on the daily chart is subtle but increasingly difficult to ignore. After forming another lower swing high beneath the summer peak, the FTSE slipped below the rising trendline from the March low, the 50-day moving average and an area that had previously provided support.
None of those developments needs to be treated as a reversal signal in isolation. Together, though, they suggest the sequence of higher lows that carried the index through much of the summer has been interrupted.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
The longer-term picture remains firmer. The 200-day moving average continues to rise beneath the market, so for now the weakness is better viewed as deterioration in the shorter-term structure rather than a broader change in trend.
What would repair the picture?
The four-hour chart gives us a clearer framework. Buyers responded once the sell-off reached the lower part of the recent range, but price is now moving back towards an area that previously provided support.
Reclaiming that area and beginning to hold above it would make the recent weakness less significant. Beyond there, the Anchored VWAP from the July high provides another useful reference for judging whether the shorter-term character of the market is improving.
FTSE 100 Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
If the recovery struggles around former support and starts to weaken again, the lower highs visible on the daily chart become harder to dismiss.
A stronger index than market
The one-week heatmap helps explain why the headline FTSE has held up as well as it has. BP and Shell have been among the stronger large-cap performers as oil prices have risen, providing meaningful support to the index because of their size.
Away from energy, the picture is much weaker. Pressure has spread across several areas of the market, including healthcare, industrials and mining, with a number of heavyweight constituents also moving lower.
FTSE 100 One-Week Heatmap
Past performance is not a reliable indicator of future results
There is an awkward twist to that energy strength. The same rise in oil supporting BP and Shell is also adding to the inflation concerns that have pushed expectations for future UK interest-rate rises higher.
A hold from the Bank of England on Thursday remains widely expected, making the voting split and the Bank's assessment of the inflation backdrop particularly important. Employment and inflation data beforehand should add another layer to that debate.
Rather than trying to predict the reaction, there are two things worth watching. If the FTSE can recover the short-term structure it has recently lost while strength begins to spread beyond energy, the recent weakness becomes easier to dismiss. If the index struggles and its resilience continues to depend heavily on a handful of oil majors, the weaker picture beneath the surface deserves more attention.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
VWAP Funnels ExplainedAnchored VWAP is normally used as a single reference point, measuring the volume-weighted average price traded since a significant event, high or low. But placing two Anchored VWAPs on the same chart can tell us something different.
When VWAPs anchored to opposing swing points begin to converge, they can create what we'll call a VWAP funnel. Brent crude recently emerged from a particularly clear example, while EUR/USD is currently developing one of its own. Comparing the two gives us a useful way of understanding what these funnels can tell us, and what they can't.
Building a VWAP funnel
The starting point is the anchors.
Rather than placing an Anchored VWAP at an arbitrary point on the chart, we want to identify two significant opposing swing points that have shaped the current market structure. One VWAP is anchored to the swing high and the other to the swing low.
Brent crude provides a good recent example. The upper VWAP is anchored to the significant swing high, while the lower VWAP begins at the subsequent swing low.
As new trading takes place, the influence of the prices traded immediately around those extremes gradually diminishes. The upper VWAP begins to fall and the lower VWAP begins to rise, causing the distance between them to narrow.
The result is the funnel.
Brent crude daily candle chart
Past performance is not a reliable indicator of future results
The important point is that the two lines aren't simply creating another version of a triangle pattern. Each is tracking the volume-weighted average price traded since a different point in the market's recent history.
The falling VWAP shows how the average price since the swing high has moved lower, while the rising VWAP shows how the average price since the swing low has moved higher. As those two reference points converge, the market is narrowing the gap between two very different starting points.
This gives us another way of viewing compression. Instead of looking only at the shape created by price, we can see the average prices measured from two opposing points gradually moving closer together.
The breakout isn't just about VWAP
Brent provides a useful example of what happens when a VWAP funnel eventually resolves. After spending time between the two converging Anchored VWAPs, price moved above the falling upper VWAP before also clearing a nearby swing high. The move then began to follow through.
There is an important distinction here. A move through one side of a VWAP funnel shouldn't automatically be treated as confirmation that the compression has been resolved.
Price can move backwards and forwards across VWAP, particularly while the market remains balanced. What made the Brent move more significant was that the move through the upper VWAP was accompanied by a break of horizontal market structure and subsequent follow-through.
The VWAPs provided context. Price action provided the evidence that the balance was beginning to shift.
Before the answer is known
EUR/USD gives us the other side of the process because its current funnel remains unresolved.
On the four-hour chart, an Anchored VWAP from the August swing high is declining, while another anchored to the subsequent swing low is rising. Price is currently trading between the two as the distance separating them continues to narrow.
EUR/USD four-hour candle chart
Past performance is not a reliable indicator of future results
This is where it is important not to turn the funnel into a prediction.
The convergence of the two VWAPs tells us that price is becoming increasingly compressed between the volume-weighted average prices measured from two opposing points. It doesn't tell us which side will ultimately win.
A brief move through either VWAP could simply see price return to the funnel. Instead of trying to anticipate the direction, we can watch what happens if price begins to move beyond one of its boundaries.
Does price simply cross the VWAP before returning inside? Can it begin to hold outside the funnel? Does momentum expand as the move develops? And does the move begin to alter the surrounding price structure?
Those questions help distinguish a simple VWAP cross from a more meaningful change in market behaviour.
Context rather than prediction
VWAP funnels are useful because they bring two perspectives together.
A single Anchored VWAP tells us how price is behaving relative to the volume-weighted average since one important point. Using opposing anchors allows us to see what happens as those two reference prices converge.
But the funnel shouldn't replace market structure or price action. Nor should every move through one of its boundaries be treated as the beginning of a new trend.
Brent shows what can happen when price escapes a funnel and the move is subsequently supported by a break of structure and continued follow-through. EUR/USD currently gives us the other side of the lesson, with the compression still unresolved.
That is arguably the more useful stage to study in real time. We don't need to predict which side of the funnel will give way. We can identify the compression in advance and then let price show us whether the balance is actually beginning to shift.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
USD/JPY: Would You Take the Second Trade?One of the hardest parts of trading isn't finding a setup. It's taking the next one after an almost identical setup has just failed.
USD/JPY's recent price action provides a useful example. Following a sharp initial sell-off, the pair produced what looked like a valid setup for a second leg lower. It failed. When a very similar setup appeared less than two weeks later, traders faced a difficult question: would you take the same trade again?
The first setup
USD/JPY's sharp reversal from its late-July highs changed the character of the market. The initial decline was unusually aggressive, with coordinated intervention from the US and Japan helping to drive the pair sharply lower.
The recovery that followed looked very different. Rather than reversing the decline with similar urgency, USD/JPY began grinding higher through a series of smaller, more overlapping daily candles.
For traders looking for a second leg lower, that contrast was significant. The initial move had been fast and directional, while the recovery was slower and more corrective. Price also remained beneath resistance while an Anchored VWAP drawn from the July high was declining towards price.
On 19th August, USD/JPY produced a large bearish candle snapping the retracement line and closing near intra-day lows.
USD/JPY daily candle chart: First setup
Past performance is not a reliable indicator of future results
Viewed at that point in time, there was plenty to support the trade. A strong initial impulse had been followed by a slower recovery, price was trading around a declining Anchored VWAP and the bearish trigger provided evidence that momentum was beginning to turn again.
There was also a relatively clear way of defining risk. The recent swing highs provided a logical area beyond which the bearish setup would begin to lose its validity.
When a valid setup fails
Instead of building on the bearish trigger, USD/JPY began to recover. Price moved back through the trigger candle and eventually pushed above the recent swing highs.
The anticipated second leg lower had failed to develop.
USD/JPY daily candle chart: First setup fails
Past performance is not a reliable indicator of future results
This is where hindsight can become very unhelpful.
Once we know that a trade lost, it is easy to return to the original chart and search for something that should have warned us. Perhaps the trigger wasn't quite strong enough, the pullback had gone too far or another confirmation should have been required.
Sometimes those reviews uncover genuine weaknesses. But sometimes a perfectly reasonable setup simply produces the wrong outcome.
Trading setups deal in probabilities rather than certainty. If a setup could reliably tell us which individual trades would succeed, there would be no need to think about position sizing, stop losses or risk/reward.
A more useful test is whether the decision made sense with the information available at the time. In this case, there was a defined setup, a trigger and a logical point at which the idea would be invalidated. The fact that price subsequently reached that point doesn't necessarily make the original decision a bad one.
Then the setup returns
Then, at the beginning of September, sellers returned again.
Once more, USD/JPY produced a large bearish daily candle which broke structure and closed near intra-day lows. For a trader following the same process, many of the ingredients behind the first trade were now present for a second time.
USD/JPY daily candle chart: Second setup
Past performance is not a reliable indicator of future results
There was, however, one important difference. It wasn't on the chart. The trader had already lost on essentially the same setup.
That can make the second trade considerably harder to take. A recent loss can encourage us to demand extra confirmation, alter the rules or decide that a setup we were previously prepared to trade suddenly isn't good enough.
But the outcome of the previous trade doesn't necessarily change the merits of the next one. If the setup still satisfies the same criteria and the risk can still be clearly defined, it deserves to be assessed on the information currently in front of us.
Which brings us back to the question in the title: would you take the second trade?
Same process, different outcome
This time, USD/JPY behaved differently.
Rather than immediately recovering from the bearish trigger, selling began to follow through. The pair continued lower before eventually breaking beneath support and extending the decline.
USD/JPY daily candle chart: Second setup follows through
Past performance is not a reliable indicator of future results
It would be easy to look at the completed sequence and conclude that the job was somehow to avoid the first setup and identify the second.
There was no reliable way of knowing in advance that the first attempt would fail while the second would develop into a sustained move. Both setups could only be judged using the information available at the time.
That is where risk management becomes inseparable from consistency. The purpose of controlling risk isn't simply to protect us when we make a poor decision. It also allows us to absorb the occasions when a perfectly valid trade doesn't work, without making the loss large enough to disrupt the wider process.
The challenge is then being prepared to take the next valid opportunity.
USD/JPY is a useful reminder that a trading edge is unlikely to reveal itself in every individual trade. Sometimes the first setup fails and the next one works. The aim isn't to know which will be which in advance, but to manage the first outcome well enough that we're still prepared to take the second.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
3 US Stocks to Watch This WeekUS markets reopen after the Labor Day break with a shortened but busy week of company-specific catalysts. Oracle and Adobe report on Thursday, while GameStop releases its full quarterly results later today.
What makes the three worth watching is that each arrives with a very different chart. Adobe's recovery is testing whether the longer-term downtrend is beginning to change, Oracle is rebuilding after a volatile summer, while GameStop is bouncing back towards an important breakdown level.
Adobe: Is the longer-term trend beginning to change?
Adobe has recovered strongly from its June lows, with the rally through July and August taking price back above the 50-day moving average.
More recently, price has traded through the falling 200-day moving average before slipping back underneath. Rather than treating that moving average as resistance in its own right, its value here is as a reference for the broader trend. It is still falling, while the 50-day moving average has started to turn higher.
That leaves Adobe in an interesting position ahead of Thursday's earnings. The shorter-term trend has improved considerably since June, but there is not yet the same evidence of change in the longer-term picture.
Adobe Daily Candle Chart
Past performance is not a reliable indicator of future results
What happens after earnings should help us judge whether those two trends are beginning to come back into line. If price can establish itself above the 200-day moving average while the shorter-term trend continues to improve, the recovery starts to look more established. A deeper retracement of the August advance would make that argument harder to sustain.
The numbers themselves will put Adobe's AI strategy back under scrutiny, while the recent announcement that Anil Chakravarthy will replace Shantanu Narayen as chief executive later this year adds another element to the outlook.
Oracle: Putting the pieces back together
Oracle comes into Thursday's earnings with a very different chart.
The huge breakout in June didn't last. Price reversed sharply from its highs and eventually fell through an area that had repeatedly provided support earlier in the year, before finally finding a low in July.
Since then, some of that damage has been repaired. Oracle has climbed back above its former support and held above it during the latest pullback. Price is now pushing back towards the highs of the August recovery, while the 50-day moving average has started to flatten after several months of decline.
Oracle Daily Candle Chart
Past performance is not a reliable indicator of future results
The next question is whether Oracle can build on that improvement. A break through the recent recovery highs could add another higher high to the developing structure. Another failure around the same area would leave the recovery with more work to do, particularly while the longer-term trend remains lower.
There is plenty for Thursday's numbers to test. Oracle's previous results showed another sharp acceleration in cloud infrastructure growth and a huge increase in contracted business, much of it linked to AI. Attention now turns to how quickly that backlog is feeding through into revenue as Oracle continues investing heavily in additional infrastructure.
GameStop: Back to the breakdown
GameStop is probably the simplest chart of the three.
Price broke decisively through a well-established area of support at the beginning of August. The sell-off continued before finding a low later in the month, and the rebound since then is now taking price back towards the area that gave way.
That puts the focus firmly on how price behaves if that former support is tested from underneath.
GameStop Daily Candle Chart
Past performance is not a reliable indicator of future results
If GameStop can reclaim the old floor and begin holding above it, August's breakdown starts to look less convincing. If the rebound stalls beneath it and the shorter-term structure begins to weaken again, there would be much stronger evidence that former support is starting to act as resistance. Both the 50 and 200-day moving averages are also still falling, keeping the broader trend pointed lower for now.
Today's results are slightly different from a normal earnings release because GameStop has already published preliminary figures for the quarter. Some of the headline numbers are therefore already known, putting more emphasis on the detail behind them and what the company is doing with its sizeable balance sheet.
Reading the reaction
There is little value in trying to second-guess three sets of company results. The charts already give us a framework for judging what happens afterwards.
For Adobe, the question is whether the shorter-term recovery can develop into a broader change in trend. Oracle needs to build on the repair that has taken place since July, while GameStop needs to show that August's breakdown can be reversed.
The results provide the catalysts. How price behaves around the structure already sitting on each chart should tell us much more about what the market makes of them.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
EUR/GBP Returns to the Scene of the BreakdownEUR/GBP has spent the past six weeks steadily recovering from its July lows, but that recovery is now approaching a much more important test. Price is returning towards an area that repeatedly acted as support during the first half of the year before finally giving way in June.
With UK and eurozone growth data due this week and the ECB meeting on Thursday, the market has both a clearly defined technical area and several potential catalysts capable of testing it.
Why the old floor matters
The area now sitting above EUR/GBP is significant because of how consistently it supported price earlier in the year. Between February and June, several attempts to break lower were absorbed around the same area before that support finally gave way towards the end of June.
The sell-off that followed was sharp, and EUR/GBP has yet to make a meaningful test of the old floor from underneath. That makes the current recovery the first real opportunity to see whether former support is now ready to act as resistance.
EUR/GBP Daily Candle Chart
Past performance is not a reliable indicator of future results
That does not mean former support has to become resistance. The longer-term descending trendline still sits above the market, but the recovery from July has been persistent and, as we drop down to the four-hour chart, there is little sign yet that buyers are backing away as the old floor approaches. This describes current chart structure only and is not a forecast of future price direction.
Pressure is building underneath
The four-hour chart adds an important piece of context. EUR/GBP has continued to form higher lows since July and has now broken through the smaller area of resistance that capped several rallies during August.
Just as importantly, price has not immediately given that breakout back. Instead, EUR/GBP has started to consolidate relatively close to its recent highs, suggesting buyers are still willing to press against the much more significant daily level overhead.
EUR/GBP Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
That makes simply reaching former support unlikely to tell us enough. A rejection followed by a break in the sequence of higher lows would provide much stronger evidence that the old floor is beginning to act as a ceiling.
Equally, a break through the daily level would only be the first step. If EUR/GBP can then hold above it, the significance would go beyond an ordinary breakout. Price would be reclaiming an area that supported the market for several months before June's breakdown, with the longer-term descending trendline then becoming the next obvious test.
The ECB meeting on Thursday could provide the catalyst for that decision. Another rate rise is widely expected, while UK and eurozone growth updates are also due this week. With the rate rise itself already well anticipated, the reaction may depend more on what the new information does to expectations for the relative path of UK and eurozone rates.
Rather than trying to second-guess those releases, the charts give us a cleaner framework. EUR/GBP has returned to the scene of its June breakdown with the shorter-term structure still improving. A rejection followed by a loss of that structure could favour the old floor holding as resistance, while a break and acceptance above it could suggest the June breakdown is beginning to unwind.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
How Lower Timeframes Can Add PrecisionA higher-timeframe setup can tell us where an opportunity may be developing, but it does not always provide the most efficient way of trading it. Daily candles can hide a considerable amount of price action, and dropping down through the timeframes can reveal structure that simply isn't visible from the higher-timeframe chart.
GBP/USD's recent reversal from a well-established resistance level provides a useful example. What initially appeared as a relatively simple rejection on the daily chart becomes progressively more detailed on the four-hour and one-hour charts, potentially allowing us to define both entries and risk with greater precision.
Start with the bigger picture
Lower timeframes are most useful when there is already a reason to be interested in a particular area of the market. Without that context, greater detail can simply mean greater noise.
On the daily chart, GBP/USD recently rallied back towards resistance around 1.3660, an area that had previously capped price earlier in the year. The first push through the level failed, with price trading above resistance before closing back beneath it.
That fakeout provided the first indication that buyers were struggling to establish themselves above resistance. Two inside days then followed as volatility contracted, before GBP/USD eventually broke lower.
GBP/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
Viewed purely from the daily chart, the sequence is relatively straightforward: test of resistance, rejection, consolidation and break lower.
The drawback is precision. A trader using only the daily structure potentially has a relatively large distance between the point at which the reversal becomes interesting and the high above which that idea would be invalidated. This is where dropping down a timeframe can add another layer of information.
Look inside the reversal
Every daily candle is simply a summary of the price action that took place on the lower timeframes. Moving to the four-hour chart therefore allows us to look inside the daily rejection and see how the reversal actually developed.
The daily fakeout was not a single event on the four-hour chart. GBP/USD pushed above the previous high before reversing sharply back beneath resistance, creating a swing fakeout and a two-bar reversal around the same area.
Price then moved into a relatively tight range beneath resistance before eventually breaking lower.
GBP/USD Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
This is the fractal nature of price action in practice. A reversal that appears as a single candle pattern on one timeframe can contain an entire sequence of swings, failed breakouts and consolidations when viewed on a lower timeframe.
More importantly, that additional structure can give us clearer parameters. Instead of treating the entire daily candle as the setup, the four-hour chart allows the rejection and subsequent consolidation to be assessed separately.
Precision can improve risk/reward
Dropping to the one-hour chart reveals still more detail around the same resistance level.
The initial move above resistance and subsequent rejection becomes much easier to see, while the consolidation that followed develops into a clearly defined range. Once price began breaking beneath the lower boundary of that range, we had a more precise indication that the balance between buyers and sellers was beginning to shift.
GBP/USD One-Hour Candle Chart
Past performance is not a reliable indicator of future results
This can have an important effect on risk/reward.
The potential downside move has not changed simply because we have changed timeframe. What changes is the precision with which an entry and invalidation point can potentially be defined.
A daily setup may require risk to be measured against the broader daily structure. On the four-hour chart, the range and swing structure can provide tighter parameters. On the one-hour chart, the same idea can potentially be refined further around the lower-timeframe breakdown.
In other words, lower timeframes don't necessarily create a better trading idea. They can provide a more precise way of expressing an idea that originated on the higher timeframe.
Greater precision comes with greater noise
There is, however, a limit to how far this process should be taken.
A tighter stop may produce a more attractive theoretical risk/reward ratio, but that does not automatically make the trade better. As the timeframe falls, normal market noise becomes increasingly significant and levels that appear important on a five-minute chart may have little relevance to the broader daily setup.
The objective is therefore not to keep moving down through the timeframes until the smallest possible stop can be found. It is to find a lower timeframe that provides additional structure without losing sight of the original higher-timeframe idea.
GBP/USD provides a useful framework for thinking about that process. The daily chart identified where the opportunity might be developing. The four-hour chart provided greater detail on what was happening around resistance. The one-hour chart provided greater precision around when the balance of price action began to shift.
Used in this way, multiple timeframes are not competing with one another. They are different views of the same market structure, with the higher timeframe providing context and the lower timeframe helping to refine execution and risk. It should be noted however, that this technique is not guaranteed to improve trading outcomes and is not a recommendation to trade in any particular way.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Brent Crude Tips the BalanceBrent crude has spent much of the past month caught between competing forces, but the balance is beginning to shift. The recovery from July’s lows has gathered momentum and price has now broken through the descending trendline that has capped the market since May.
The latest escalation in the conflict has provided a fresh catalyst, but the breakout itself is only part of the story. What matters now is whether Brent can hold onto the technical ground it has regained.
The balance begins to shift
Throughout August, two Anchored VWAPs provided a useful way of reading the recovery from July’s lows. The lower VWAP tracked the average price paid since the summer low, while the upper VWAP tracked the average price since Brent began falling from its May high.
Price spent much of the month caught between the two, reflecting a market that was recovering but had yet to make a convincing break from the broader decline.
That balance has now started to change. Brent has moved above the upper Anchored VWAP and broken through the descending trendline connecting the May and July highs. At the same time, the sequence of higher lows that has developed since July remains intact.
Taken together, that is a more meaningful improvement than the breakout of any single technical level. The recovery is beginning to challenge the structure that has kept Brent under pressure since the spring.
Brent Crude Daily Candle Chart
Past performance is not a reliable indicator of future results
The macro backdrop has also changed. The latest escalation between the US and Iran has increased concerns around further disruption to energy supplies, while rising gas prices are feeding into inflation expectations and putting additional pressure on global bond markets.
That does not mean geopolitical escalation automatically translates into higher oil prices. It does, however, mean the technical breakout is developing alongside a fresh repricing of the risks surrounding the energy market rather than in isolation.
Holding the breakout matters more
The four-hour chart gives us a clearer view of what to watch next. Brent has not simply pushed through the descending trendline and upper Anchored VWAP. It has also cleared the previous swing high before beginning to consolidate above that former resistance.
That is an important distinction. Breaking resistance tells us buyers were strong enough to overcome it. What happens afterwards tells us whether the market is prepared to accept those higher prices.
Brent Crude Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
So far, the pullback from Wednesday’s intraday high has not undone the breakout. Former resistance remains beneath the market, while the short-term sequence of higher lows is also intact.
That gives us a fairly clean framework from here. If Brent can continue to hold above the structure it has recently broken, particularly during any deeper pullback, it would add weight to the idea that the balance has shifted in favour of buyers. A move back beneath former resistance and into the previous range would make the breakout much less convincing.
With headlines surrounding the conflict capable of producing sharp moves in either direction, chasing each new development is unlikely to offer much clarity. Watching whether the market can hold the technical progress it has already made should provide a better indication of whether Brent’s recovery is developing into something more durable.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Where Should You Draw a Fixed Range Volume Profile?Fixed Range Volume Profile can provide us with a useful view of where the greatest amount of trading activity has taken place during a particular move. The difficult part is often deciding exactly where that profile should begin and end.
There is no single range that will always be correct. The range should reflect the part of the market you are trying to understand, and as price develops, the question you are asking may change with it. Gold's recent price action provides a useful example of how a Fixed Range Volume Profile can be applied and then updated as a move develops.
Start with the move you want to measure
Before drawing a Fixed Range Volume Profile, it helps to establish exactly what part of the market you are trying to analyse.
Gold recently spent several weeks consolidating within a narrowing wedge before breaking sharply higher. The breakout marked a clear change in behaviour, with price accelerating away from the consolidation before eventually reaching a longer-term descending trendline.
With that initial move complete, there were two relatively obvious points from which to build the profile: the low immediately before the wedge breakout and the subsequent high where the rally first stalled.
Gold Daily Candle Chart (zoomed out view)
Past performance is not a reliable indicator of future results
Gold Daily Candle Chart (zoomed in view)
Past performance is not a reliable indicator of future results
Drawing the profile across this specific move allows us to see where the greatest concentration of trading took place during the advance. In particular, the Point of Control (PoC) identifies the price at which the greatest volume was recorded within the selected range.
This is why choosing the range matters. Extending the profile across months of unrelated price action would answer a different question, while starting halfway through the rally would exclude an important part of the move we are trying to understand.
Watch what happens on the return
The information produced by the profile becomes particularly useful when price begins to retrace.
After reaching the longer-term descending trendline, gold pulled back towards the Point of Control from the initial advance. Rather than assuming the PoC would automatically provide support, we could use the area as a reference point and watch how price behaved when it returned.
In this case, buyers stepped back in around the area and gold subsequently made a second push higher.
Gold Daily Candle Chart
Past performance is not a reliable indicator of future results
The distinction is important. The Point of Control did not predict the bounce. It simply highlighted an area where a considerable amount of trading had previously taken place.
That previous activity gives us a reason to pay attention when price returns, but it is the subsequent reaction that determines whether the area remains relevant. A rejection of lower prices, a period of consolidation or renewed buying pressure can all provide additional information that a horizontal line on its own cannot.
Update the range as price develops
Gold's subsequent rally also demonstrates why a Fixed Range Volume Profile does not necessarily remain fixed forever.
The first profile was designed to answer a specific question: where had trading activity been concentrated during the initial breakout leg?
Once gold found support and pushed to a new high, there was now a larger move to analyse. The original starting point remained relevant because it marked the origin of the advance, but the end of the range could be extended to incorporate the second push higher.
Gold Daily Candle Chart
Past performance is not a reliable indicator of future results
Doing so changes the volume distribution because we are now measuring all the trading activity that has taken place from the pre-breakout low through to the latest high.
Gold has since pulled back sharply towards another high-volume area and the Point of Control generated by this broader range. Once again, that does not mean support will automatically appear.
What it does tell us is that price is returning to an area where the market previously conducted a significant amount of business. If buyers begin to defend the area and price starts to stabilise, that previous acceptance may remain relevant. If gold instead trades decisively through the area and begins establishing itself beneath it, the failure of the PoC to provide support would itself provide useful information about the changing character of the move.
Let the question define the range
There is no universally correct place to draw a Fixed Range Volume Profile because different ranges answer different questions.
A trader analysing an entire consolidation may choose the boundaries of that consolidation. A trader studying a breakout may instead measure from the origin of the move to the subsequent swing high. As that trend develops, the range can then be extended to incorporate new price action while retaining a structurally relevant starting point.
The important thing is to avoid selecting the range simply because it produces attractive levels on the chart. First decide which phase of the market you are trying to understand, then allow that structure to determine the range.
Fixed Range Volume Profile is ultimately a map of where trading activity has previously been concentrated. The Point of Control and other high-volume areas can show us where to pay closer attention, but it is the market's reaction when those areas are revisited that tells us whether they still matter.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Education 
Lower High Puts S&P Breakout Under PressureThe S&P 500 is approaching an important technical test after Friday’s rejection created the first credible lower high since the early-August breakout.
The broader uptrend remains intact, but with a well-defined layer of support sitting beneath current prices and a busy week for US economic data ahead, there is now a much clearer framework for judging whether recent weakness is simply consolidation or the beginning of a deeper pullback.
Why the lower high matters
Friday’s bearish pin-bar is more useful in context than it is as a standalone reversal signal. It appeared below the August high after the market had already lost some momentum, while Monday’s negative close provided the first indication that the rejection was attracting follow-through.
That does not make the broader trend bearish. Price remains above a rising 50-day moving average and, importantly, above the resistance broken at the beginning of August. What it does is create a potential change in short-term structure, with the market now needing to defend support if the breakout is to remain intact.
S&P 500 Daily Candle Chart
Past performance is not a reliable indicator of future results
This distinction is important because lower highs only really gain significance when they are followed by lower lows. Until support gives way, Friday’s rejection could prove to be little more than another pause within the existing trend.
A clear line in the sand
The four-hour chart gives us a cleaner way of judging what happens next. Price has spent the past couple of weeks building a relatively well-defined floor just above the former breakout area, creating a useful layer of support beneath the market.
A decisive break through that zone would change the character of the recent price action. Instead of simply consolidating above the breakout, the S&P would have formed a lower high and then lost the support beneath it. That combination would give the developing lower high considerably more weight and bring the possibility of a deeper retracement into play.
The other side of the setup is equally important. If support continues to attract buyers, the lower high remains provisional and the recent weakness can still be viewed within the context of the broader uptrend.
S&P 500 Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
The timing adds another layer. US job openings and the Fed’s Beige Book arrive on Wednesday, followed by non-farm payrolls on Friday, giving the market several opportunities to reassess the balance between a weakening labour market and still-elevated inflation.
Trying to second-guess those releases is unlikely to add much. Having the technical framework in place beforehand is far more useful because it allows us to judge the market’s response rather than the numbers themselves.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
What We Can Learn From EUR/USD's Recent Price ActionEUR/USD has been trending steadily higher over the past month, but the most useful lessons aren't necessarily found in the direction of the move itself. The way those gains have developed tells us considerably more about how momentum behaves once a trend becomes established.
Looking at the four-hour chart, three features stand out: the relationship between impulse and consolidation, the behaviour of pullbacks around Anchored VWAP and the structure the market has created along the way. Each offers a practical lesson that can be applied well beyond EUR/USD.
Impulse and Consolidation
One of the clearest features of EUR/USD's uptrend is that relatively little of the time has actually been spent moving sharply higher. Most of the gains have arrived through short bursts of momentum, separated by much longer periods of consolidation.
The late-July breakout provides the first example. A sharp impulse carried EUR/USD higher before price spent much of the following two weeks moving sideways. Another burst of momentum followed in mid-August, followed by a tighter pause, before the next impulse carried the pair higher.
EUR/USD Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
There is a useful trading lesson here. By the time an impulse is obvious, a meaningful part of the move may already have taken place. The quieter periods between those moves can therefore be just as important, providing an opportunity to assess how the market structure is developing before momentum returns.
That doesn't mean every consolidation should be traded as a continuation pattern. Some will fail. The point is that momentum frequently develops in bursts, and recognising that rhythm can help avoid the temptation to chase price precisely when it is moving fastest.
Reading the Pullbacks
Pullbacks have been relatively shallow throughout the advance, but their location has also been revealing.
Anchoring VWAP around the area immediately preceding the late-July breakout gives us a measure of the volume-weighted average price since the move began. On two subsequent occasions, EUR/USD pulled back towards the rising Anchored VWAP before buyers regained control.
EUR/USD Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
The important observation isn't simply that price touched VWAP and bounced. It is that attempts to retrace the advance repeatedly found demand around an average price that was itself continuing to rise.
This provides another way of assessing the quality of a trend. As long as pullbacks remain relatively contained and buyers continue to respond around meaningful reference points, there is little evidence that the underlying structure has materially deteriorated.
Anchored VWAP shouldn't be treated as mechanical support, however. Its value comes from the reaction around it rather than the line itself.
Structure Matters Most
Perhaps the most useful information left behind by the rally comes from the periods when EUR/USD wasn't trending strongly at all.
Each consolidation has created horizontal structure beneath the market. As the trend has progressed, those areas have formed at progressively higher prices, giving traders a series of reference points against which future pullbacks can be judged.
EUR/USD Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
This becomes particularly relevant now that EUR/USD has pulled back towards its rising trendline. The trendline helps visualise the direction and rate of the advance, but its precise positioning is subjective. The horizontal levels created by previous areas of consolidation provide a less subjective record of where buyers and sellers have previously competed for control.
A break of the trendline alone would therefore provide limited evidence that the broader trend has changed. Greater significance would come from price beginning to lose the horizontal structure created during the advance, particularly if a former support area subsequently starts acting as resistance.
This also provides a useful way of separating a routine pullback from a genuine change in character. Rather than trying to decide whether every red candle marks the top of the move, traders can monitor how much of the structure supporting the trend is actually being surrendered.
Putting It Together
EUR/USD's recent advance highlights three different ways of reading the same trend. The impulse-and-consolidation sequence tells us something about how momentum is being delivered, Anchored VWAP provides context around the pullbacks, and the structure created during those consolidations gives us reference points for judging whether the trend remains intact.
None needs to be used as a standalone signal. Together, however, they provide a much better picture than simply drawing a trendline and assuming the trend remains bullish until that line breaks.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Tesla Tests the Limits of Its August RecoveryTesla has spent August steadily repairing the damage created by July’s earnings gap, but that recovery has now reached a much more demanding part of the chart.
Several measures of resistance have converged around the same area, and the first reaction has been one of rejection. What happens from here should tell us much more about the strength of the August recovery than the rally itself.
Repairing the earnings gap
The narrative surrounding Tesla has shifted since July’s earnings disappointment. Attention has moved back towards autonomy and the potential expansion of its robotaxi business, giving the market a reason to look beyond some of the near-term concerns that drove the original sell-off.
What matters from a trading perspective is how that change in sentiment has been expressed. Rather than producing a brief oversold bounce, Tesla has recovered steadily within a relatively narrow ascending channel. That suggests buyers have been prepared to absorb supply at progressively higher prices, but recovering towards the origin of a breakdown is not the same as reversing it.
Tesla is now testing the area where that distinction becomes important.
Tesla Daily Candle Chart
Past performance is not a reliable indicator of future results
Three different technical references have converged around the upper end of the recovery. Former support marks the upper boundary of the remaining earnings gap, while the 50-day moving average has fallen into the same area. The Anchored VWAP taken from the pre-earnings July swing high adds another layer, showing the volume-weighted average price since the market began repricing the stock ahead of the results.
The fact that these references arrive together makes the area more useful than any one of them in isolation. Tesla’s latest push into this zone has already met resistance, but one rejection is not enough to conclude that the August recovery has run its course. The more useful information should come from what happens next.
Waiting for the structure to confirm the rejection
The four-hour chart provides a cleaner framework for judging that response. Despite the rejection from daily resistance, Tesla remains within the ascending channel that has contained much of the August recovery. Until that structure gives way, buyers still retain control of the immediate trend.
Momentum is beginning to soften as well. RSI has rolled over following the latest test of resistance, adding some weight to the rejection, although momentum alone provides little confirmation while price remains inside the channel.
Tesla Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
For those looking to trade the rejection, a decisive break beneath the August channel could provide the first clearer evidence that the character of the recovery is beginning to change. A weak retest of the broken channel would add further confirmation, while also providing a more defined framework for managing risk than simply selling into resistance.
The alternative deserves equal attention. If Tesla holds the channel and pushes back through the cluster of daily resistance, the initial rejection loses significance and the technical repair of July’s breakdown becomes harder to dismiss.
For now, resistance has been identified, but the trade still needs confirmation. The next move around the four-hour channel should help distinguish between a pause in Tesla’s August recovery and the start of something more meaningful.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Gold's Recovery Moves Up a GearGold's initial August breakout has developed into something more substantial. Buyers have absorbed the first meaningful pullback, momentum has accelerated again and price is now breaking through some of the bigger technical barriers that have defined the correction since February.
With the macro backdrop also providing a fresh tailwind, the recovery is starting to challenge the broader downtrend rather than simply rally within it.
Macro tailwinds gain traction
The interesting part of last week's macro move was not simply that Treasury yields fell and the dollar weakened. Gold has had periods of supportive news throughout its correction without being able to turn them into anything particularly durable.
This time, the response has been stronger. The Treasury's decision to increase purchases of longer-dated government debt helped ease pressure in the bond market, while softer US data has reduced some of the urgency around further tightening. Crucially, this arrived when gold was already building on its initial August breakout.
During the spring and early summer, supportive catalysts repeatedly ran into a market conditioned to sell rallies. The latest response suggests that dynamic is beginning to shift, with buyers now doing more with a macro backdrop that is moving in their favour.
Longer-term resistance gives way
The initial August breakout reclaimed the 50-day moving average, but the broader descending trendline from the February highs and the 200-day moving average still presented a much bigger test.
Both have now been cleared, removing two of the technical barriers that previously favoured selling into strength. The descending trendline had defined the sequence of lower highs throughout the correction, while the 200-day moving average added another layer of resistance in almost exactly the same area.
Breaking through them does not confirm a longer-term trend reversal, but it changes the context quite a bit. The focus now shifts towards whether gold can establish itself above these levels rather than simply trade through them temporarily.
XAU/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
Momentum survives its first test
The four-hour chart adds another useful layer. Following the first August impulse, momentum cooled and the 9 and 21-period EMAs compressed as gold retraced. Rather than developing into a deeper reversal, the pullback established a higher low before buyers returned.
The renewed separation between the two EMAs reflects another acceleration in momentum, but the sequence behind it is arguably more important. Buyers have already absorbed a period of weakness without surrendering the improving structure, allowing the latest leg to develop from a higher low rather than relying on one uninterrupted burst of buying.
There is a trade-off to that strength. Price is becoming increasingly stretched above its shorter-term averages, which makes the risk/reward of chasing an established move less attractive even while momentum remains strong.
That puts more emphasis on how the next pause or pullback develops. The broken descending trendline and 200-day moving average provide useful daily reference points for judging whether former resistance can begin to attract buyers, while the four-hour structure should offer an earlier read. A controlled consolidation that preserves the sequence of higher lows would look very different from a deeper reversal that breaks recent structure and starts pulling the 9 and 21-period EMAs lower.
Gold has already shown it can build on the initial breakout. How well the improved structure holds when momentum next cools should tell us much more about the durability of the recovery than simply watching how far the current leg can extend.
XAU/USD Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Three Early Signs Resistance Could HoldUnderstanding how to read the battle that takes place around a key resistance zone can make a significant difference to both trade selection and trade management. Sell too early and you risk fading a trend that still has momentum behind it. Wait too long and much of the move may already have unfolded. The challenge isn't identifying where resistance sits; it's recognising when buyers are beginning to lose control.
The FTSE 100's recent test of its all-time highs provides a useful example. Rather than focusing on the eventual move lower, let's look at three subtle changes in price action that suggested resistance was becoming increasingly difficult to overcome before the decline gathered momentum.
1. Failure to close above resistance
The first warning sign often isn't that price fails to trade above resistance. Strong trends frequently push through important levels as buyers test whether the market is willing to accept higher prices.
The more important question is what happens by the close.
When the market repeatedly probes above resistance but finishes the session back beneath it, it suggests that buying enthusiasm is being met by sufficient selling pressure to prevent the breakout from holding. One failed close isn't enough to conclude that resistance will hold, but it should encourage you to pay closer attention to how price behaves during subsequent tests.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
During the FTSE 100's initial test of its all-time highs, buyers briefly traded above resistance but were unable to maintain those gains into the close. Rather than confirming a breakout, the session left behind an early indication that sellers were still prepared to defend the level.
2. Repeated rejection from resistance
Markets rarely give up after a single attempt. When a trend remains healthy, buyers will often return to challenge the same resistance zone multiple times.
What matters is whether each attempt is making genuine progress.
In the FTSE's case, buyers continued revisiting the highs, but each rally quickly stalled around the same area. Instead of seeing strong closes above resistance and an expansion in momentum, price began clustering beneath the highs in a series of relatively small daily candles.
That type of behaviour often reflects hesitation rather than conviction. Buyers are still present, but they are no longer demonstrating the same ability to establish acceptance above resistance.
FTSE 100 Daily Candle Chart
Past performance is not a reliable indicator of future results
By this stage, the evidence had started to build. One failed breakout can be dismissed as noise. Several failed attempts at the same level begin to suggest that resistance is becoming increasingly difficult to overcome.
3. The first break of structure on a lower timeframe
The daily chart tells us that buyers are struggling. The hourly chart helps us identify when that loss of momentum begins to translate into a genuine change in market structure.
One of the earliest signs is the first break of the sequence of higher highs and higher lows that has been supporting the advance. Once price produces its first lower low, buyers are no longer maintaining control of the short-term trend and the probability of resistance continuing to hold begins to increase.
This doesn't confirm that a larger reversal will follow, but it does provide additional evidence that the balance between buyers and sellers is changing.
FTSE 100 Hourly Candle Chart
Past performance is not a reliable indicator of future results
The hourly chart shows the first meaningful break of structure developing after several unsuccessful tests of resistance. While the daily chart was already highlighting weakening buying pressure, the lower timeframe provided a more timely indication that momentum was beginning to shift.
FTSE 100 Hourly Candle Chart
Past performance is not a reliable indicator of future results
The move that followed illustrates why many traders prefer to let the evidence build rather than reacting to the very first rejection. By combining the higher timeframe picture with a lower timeframe change in structure, traders were able to make decisions based on evolving market behaviour rather than trying to predict the exact turning point.
Build the evidence
Resistance rarely announces itself with a single candle. More often, the clues develop gradually as buyers lose momentum and sellers become increasingly willing to defend the same area.
A failure to close above resistance, repeated rejection from the highs and the first lower timeframe break of structure don't guarantee that a reversal will follow. Together, however, they represent a meaningful shift in market behaviour that can help traders assess whether the balance of probability is beginning to favour the sellers.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Reading Nvidia's Technical Strength Ahead of EarningsNvidia's August rally has reshaped the technical picture ahead of next week's Q2 earnings. Let's take a look at what the recent price action is telling us, and where the balance of risk and reward now sits as the market heads into one of its biggest catalysts of the quarter...
The recovery has rebuilt confidence
July's double bottom around the 200-day moving average proved to be far more significant than a routine technical bounce. It marked the point where buyers consistently rejected lower prices, preventing the previous correction from developing into a broader change in trend.
Improving sentiment towards the wider AI sector helped reinforce that recovery. Fresh capital expenditure commitments from the major cloud providers eased concerns that AI spending was beginning to slow, while renewed confidence in long-term infrastructure investment encouraged investors back into the sector. Nvidia responded by breaking decisively above the July resistance area, but the more revealing development has been how the shares have behaved since.
Nvidia Daily Candle Chart
Past performance is not a reliable indicator of future results
Markets driven purely by short-term enthusiasm often struggle to hold onto breakouts. Nvidia has taken a different path. Rather than immediately filling the August gap or falling back below former resistance, buyers have continued accepting higher prices. That suggests the breakout has become an area of value rather than simply a temporary burst of momentum.
The pause may matter more than the rally
The four-hour chart adds another important layer to the story. Since the strong advance at the beginning of August, Nvidia has spent several sessions consolidating its gains while trading volumes have gradually declined.
At first glance, lighter volume can sometimes be interpreted as fading buying interest. Ahead of a major earnings announcement, however, it can also reflect a market becoming more selective. Existing holders appear comfortable maintaining positions, while many new participants are waiting for fresh information before committing additional capital.
Equally important is the way the market has chosen to consolidate. Rather than retracing a meaningful proportion of the August advance, Nvidia has largely moved sideways, allowing the shorter-term moving averages to catch up with price. Strong trends often pause through time rather than price, and so far that has been the characteristic of this recovery. While this pattern points to underlying strength, markets can turn unpredictably, and this consolidation should not be read as a guarantee of continued upside.
Nvidia Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
As earnings approach, the gap above July resistance becomes an increasingly important reference point. If any initial weakness continues to attract buyers above that former resistance, it would reinforce the view that the market remains comfortable with Nvidia's higher valuation. A decisive move back below it would suggest that much of the recent rally reflected pre-earnings positioning rather than a lasting shift in conviction.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Brent Crude and the Battle Between Two VWAPsBrent crude has spent much of the past month caught between two competing macro narratives. Supply disruption across the Middle East continues to underpin prices, while weaker demand forecasts and slowing global growth have limited the market's ability to sustain rallies.
One of the clearest ways of visualising that tension comes from two Anchored VWAPs, each highlighting where different groups of market participants are beginning to influence price action.
Supply and demand remain at odds
The macro backdrop continues to send mixed messages. On one side, shipping disruption through the Strait of Hormuz, constrained alternative export routes and declining global inventories continue to provide an important floor beneath oil prices. The International Energy Agency estimates that global inventories fell sharply during July, reflecting the logistical disruption created by reduced oil shipments.
Against that sits a very different narrative. Both the IEA and OPEC have lowered their demand expectations as concerns over global growth continue to build, while a surprisingly large increase in US crude inventories has reinforced the view that parts of the market remain well supplied. Many institutions still expect Brent to trade lower into year-end as supply chains gradually normalise and demand softens.
The battle between two VWAPs
One of the more interesting features on the chart comes from two Anchored VWAPs.
The first is anchored to the April high, when Brent's broader decline began. That VWAP now sits close to the $90 area, reinforcing a level that has repeatedly capped recent rallies. Rather than acting as resistance simply because previous highs sit nearby, it also represents the average price paid by traders who bought before the decline gathered pace. As Brent approaches that level, many of those participants are getting close to breakeven, increasing the likelihood of selling pressure as positions are reduced.
The second VWAP is anchored to the July low, where Brent began its recovery. Here the picture is very different. Buyers who entered during that rebound continue to hold profitable positions, and recent pullbacks have repeatedly found support around that average price. Rather than aggressively taking profits, those participants have so far shown a willingness to defend the recovery.
The result is a market caught between two competing groups. One continues to sell strength near the April VWAP, while the other continues to buy weakness around the July VWAP.
Brent Crude Daily Candle Chart
Past performance is not a reliable indicator of future results
What traders should watch next
This creates a useful framework for the sessions ahead. A move above $90 on its own may not be enough to suggest the balance has shifted. What may, potentially, be more important Brent can remain above the April high VWAP after any initial breakout attempt, potentially signalling that buyers are beginning to absorb the supply that has repeatedly emerged around that level.
On the downside, a decisive break beneath the July low VWAP would potentially suggest the buyers who have supported the recovery are beginning to lose conviction. Until one of those groups gives way, Brent may continue to rotate between the two average prices rather than developing a sustained trend.
Brent Crude Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Why Yesterday's Point of Control MattersMost traders begin the session by marking out the previous day's high and low. Those levels often provide a useful framework for the day ahead, highlighting where momentum accelerated or where buyers and sellers previously lost conviction. Yet another reference point often receives far less attention despite representing where the market spent most of its time doing business.
The Prior Day's Point of Control (PoC) , derived from the Session Volume Profile, identifies the price at which the greatest volume traded during the previous session. It isn't a buy or sell signal, nor should it automatically be treated as support or resistance. Instead, it provides a useful reference point that can help traders understand where the market previously found the greatest agreement on price. Three observations are particularly worth paying attention to.
Strong trends often see value move higher
One of the more interesting characteristics of strong trends is that they aren't driven purely by price. As markets continue to trend, the Point of Control will often migrate higher from one session to the next.
The market isn't simply pushing to higher prices before immediately rejecting them. Instead, the greatest concentration of trading activity is gradually shifting upwards as buyers and sellers become increasingly willing to transact at higher prices.
This doesn't guarantee the trend will continue, but it does suggest that the market is accepting those higher prices rather than merely visiting them.
US500 Five-Minute Candle Chart
Past performance is not a reliable indicator of future results
The recent S&P 500 provides a good example. As the market continued to rally, each session's Point of Control gradually stepped higher. Rather than repeatedly returning to previous value areas, the market established new areas where the majority of business was conducted, consistent with the strength of the underlying trend.
The prior day's Point of Control creates a useful reference
Once the session closes, yesterday's Point of Control becomes a level worth carrying forward into the next trading day.
Not because the market must react there, but because it highlights an area where a significant amount of business was previously transacted. Whenever price returns to that level, traders have an opportunity to observe whether the market still considers it an area of value or whether sentiment has shifted.
US500 Five-Minute Candle Chart
Past performance is not a reliable indicator of future results
Here, the Session Volume Profile identifies the price where the greatest volume traded throughout the session. While the profile itself disappears once the day has finished, the Point of Control remains a useful reference point that can be projected into the following trading session.
Watch the reaction, not the level
Perhaps the biggest mistake traders make is assuming the Prior Day's Point of Control should automatically act as support or resistance.
Like every technical level, its value comes from how the market behaves around it rather than from the line itself.
Sometimes price will trade straight through it without hesitation, signalling that yesterday's area of value is no longer particularly relevant. On other occasions, the market will repeatedly struggle to establish itself above or below the level, suggesting participants are once again making decisions around the same price.
Repeated reactions often become far more meaningful than the first touch.
US500 Five-Minute Candle Chart
Past performance is not a reliable indicator of future results
In this example, price repeatedly tested the Prior Day's Point of Control from below before failing to establish acceptance above it. Each rejection reinforced the level as an area where selling pressure re-emerged , providing traders with a useful intraday reference rather than a mechanical trading signal.
A reference point rather than a prediction
The Prior Day's Point of Control won't identify every turning point, nor should it be expected to. Its real value lies in providing additional context.
Like any technical tool, the Point of Control can provide additional context when considered as part of a broader analytical framework.. Used in isolation it is simply another horizontal line. Used alongside price action, it becomes a practical way of identifying where yesterday's auction may still be influencing today's decisions.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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SpaceX: Relief Rally or Trend Reversal?Earlier in the week, investors were focused on rising AI spending and the impending post-IPO lock-up expiry. By Friday, attention had shifted towards accelerating AI revenues, improving returns on AI investment and the fact that insiders hadn't rushed for the exit. Whether that change in sentiment develops into a broader trend reversal is now becoming a question for the chart rather than the headlines.
The narrative has changed
SpaceX's first quarterly results as a public company gave investors plenty to think about. Revenue almost doubled compared with a year earlier, supported by continued growth across Starlink and the company's expanding AI business. Management also argued that its AI infrastructure is beginning to generate returns far more quickly than many had expected, with new compute capacity paying for itself in less than a year.
Earlier in the week, however, those positives were largely overshadowed by concerns over the sheer scale of investment required to deliver that growth. Capital expenditure remained exceptionally high, free cash flow stayed negative and investors questioned how long Starlink's cash generation could continue funding such an ambitious expansion.
By the end of the week, the conversation had changed. The first post-IPO lock-up period passed without the wave of insider selling many had anticipated, removing one of the market's biggest concerns almost overnight. An analyst upgrade and improving sentiment across the tech sector added further support, allowing investors to place greater emphasis on the company's longer-term growth prospects rather than its near-term spending requirements.
A key retest of broken support
The technical picture naturally reflects the improving shift in sentiment.
After falling almost 30% from the July highs, SpaceX has established a triple bottom around the $107 area before producing its first higher swing high for several weeks. That sequence matters because it interrupts the pattern of lower highs and lower lows that had defined the previous decline and suggests sellers are no longer exerting the same degree of control.
Friday's break above the early August swing high strengthened that message further by confirming the first meaningful higher high of the recovery. On the four-hour chart, the 9-period EMA has also crossed above the 21-period EMA, with both averages now beginning to turn higher. While moving averages should never be viewed in isolation, they reinforce the view that short-term momentum is becoming increasingly constructive.
The next technical challenge now comes into view around $150. When that level broke in July it triggered an aggressive acceleration lower, making it one of the most important technical reference points on the chart. Markets often revisit former support after a major breakdown, and the reaction around those levels can provide valuable insight into whether sentiment has genuinely improved or whether sellers are simply waiting for higher prices to re-enter.
If buyers can continue defending higher lows as the recovery develops, attention is likely to remain focused on that $150 area. How the shares behave once they get there may ultimately tell traders far more than last week's impressive rally.
SpaceX Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Can Gold Build on Its Short-Term Momentum?Gold has finally broken out of the tight structure that contained price through July, with last week’s rally carrying the market back above its 50-day moving average and through the most recent descending trendline.
The short-term picture has improved quickly, but the broader correction has not disappeared. The question now is whether buyers can turn that burst of momentum into something more durable as price approaches heavier resistance overhead.
Macro catalysts finally release the pressure
For much of the year, gold has struggled with a difficult macro mix. Higher energy prices kept inflation risks alive, the Fed had little reason to sound softer and the dollar remained firm enough to keep pressure on precious metals. Last week finally loosened that combination.
The easing in Middle East tensions took some of the heat out of oil, while weaker US employment data reduced the urgency around further tightening. That mattered because gold was already sitting in a technical structure where selling pressure had been losing momentum. Once the macro backdrop stopped working against the market, the balance shifted quickly.
XAU/USD Daily Candle Chart
Past performance is not a reliable indicator of future results
What is more important than the headlines themselves is how decisively price responded. Previous rallies throughout the correction struggled to get through the 50-day moving average and failed beneath descending resistance. This time, gold moved through both with far less hesitation, suggesting the market was not simply reacting to one data point but beginning to reassess the broader policy backdrop.
That still leaves an important distinction between short-term momentum and a confirmed change in the longer-term trend. The 200-day moving average remains overhead, while the broader descending structure from the February highs is still intact. Gold has improved its position, but it has not yet cleared the levels that would force a more substantial rethink of the wider correction.
A change of character
The four-hour chart shows why the latest move deserves more attention than the previous recovery attempts.
Through July, the market repeatedly failed to build momentum away from support. Rallies stalled, sellers returned and price was pushed back into the same contracting range. That behaviour changed last week. Once the upper boundary gave way, buying became more persistent and pullbacks remained shallow, allowing price to extend without immediately giving back the breakout.
That is the key difference. Gold has moved from a market where rallies were consistently sold into one where buyers are, for now, prepared to defend higher prices. It does not confirm a new trend on its own, but it may indicate a change in short-term market behaviour compared with earlier in the year.”.
XAU/USD Four-Hour Candle Chart
Past performance is not a reliable indicator of future results
If the first retracement remains controlled and buyers continue to defend above the former breakout area, confidence in the short-term shift would continue to build. A deeper move back into the old range would raise a different question, suggesting last week’s rally was driven more by short covering and a rapid adjustment in expectations than by a lasting improvement in demand.
For now, the focus is less on chasing the move and more on how gold behaves once momentum cools. The way buyers respond to the first proper pullback should provide the clearest indication of whether this short-term improvement has enough support to challenge the broader downtrend.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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