Aiming Towards Lower Demand Zone.
The chart provided shows the price action of XAUUSD on a 4H timeframe, from my perspective. The price is currently moving within a well-defined ascending channel, with the upper and lower trendlines acting as resistance and support, respectively. This channel indicates that the market has been in a bullish trend for this timeframe.
However, the chart also highlights several important supply and demand zones that could influence future price action. A prominent supply zone is marked around the 2,513.50 level, suggesting that this is an area where sellers have previously entered the market, causing a reversal or significant price reaction. Another supply zone is indicated above the 2,520.00 level, hinting at a potential area where selling pressure could increase again. On the downside, there is a demand zone marked around the 2,353.05 level, representing an area where buyers have previously stepped in, leading to a price increase. This zone could act as a significant support level if the price moves down.
The market structure indicates that the price has been testing the upper supply zone several times, which may have built up liquidity above these highs. The chart suggests the possibility of a liquidity grab above these highs, potentially trapping buyers before reversing downward. The projected price movement on the chart shows a zigzag pattern indicating a potential bearish reversal after a liquidity grab above the supply zone around 2,513.50. This movement is expected to break below the ascending channel, suggesting a shift from the current bullish structure to a bearish one.
The liquidity range on this chart extends from the highs around the upper supply zone (2,513.50 - 2,520.00) down to the demand zone around 2,353.05. This range encompasses areas where stop losses for both long and short positions may be located, making them areas of interest for institutional players looking to exploit liquidity. The key directional level to watch is around 2,446.26. A break below this level and the channel’s lower trendline would indicate a shift in market structure from bullish to bearish. If this level is breached, it could trigger a significant downward move toward the next major demand zone around 2,353.05 or even lower toward 2,296.61.
Overall, from my perspective, the chart shows potential for a liquidity grab above recent highs, followed by a sharp move downward, breaking the ascending channel. This would suggest a continuation of the bearish trend, aiming towards lower demand zones.
However, the chart also highlights several important supply and demand zones that could influence future price action. A prominent supply zone is marked around the 2,513.50 level, suggesting that this is an area where sellers have previously entered the market, causing a reversal or significant price reaction. Another supply zone is indicated above the 2,520.00 level, hinting at a potential area where selling pressure could increase again. On the downside, there is a demand zone marked around the 2,353.05 level, representing an area where buyers have previously stepped in, leading to a price increase. This zone could act as a significant support level if the price moves down.
The market structure indicates that the price has been testing the upper supply zone several times, which may have built up liquidity above these highs. The chart suggests the possibility of a liquidity grab above these highs, potentially trapping buyers before reversing downward. The projected price movement on the chart shows a zigzag pattern indicating a potential bearish reversal after a liquidity grab above the supply zone around 2,513.50. This movement is expected to break below the ascending channel, suggesting a shift from the current bullish structure to a bearish one.
The liquidity range on this chart extends from the highs around the upper supply zone (2,513.50 - 2,520.00) down to the demand zone around 2,353.05. This range encompasses areas where stop losses for both long and short positions may be located, making them areas of interest for institutional players looking to exploit liquidity. The key directional level to watch is around 2,446.26. A break below this level and the channel’s lower trendline would indicate a shift in market structure from bullish to bearish. If this level is breached, it could trigger a significant downward move toward the next major demand zone around 2,353.05 or even lower toward 2,296.61.
Overall, from my perspective, the chart shows potential for a liquidity grab above recent highs, followed by a sharp move downward, breaking the ascending channel. This would suggest a continuation of the bearish trend, aiming towards lower demand zones.
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