XAUUSD Short Signal
Analysis: Why XAUUSD is bearish
1. fair value gap incl. deep golden pocket (FVG):
The price has reached a fair value gap (FVG) incl. the cosequent encroachment and the deep golden pocket in the 2,717.53 area, which acts as resistance. Such untested liquidity areas are often used by sellers to take short positions. As long as the price remains below this area, selling pressure is likely to persist.
2nd Fibonacci retracement level:
The market is below the 50% Fibonacci retracement level (2,664.31), indicating a dominant downtrend. In addition, the area between the Fibonacci levels 0.705 (2,716.04) and 0.79 (2,737.48) is in a resistance zone that has already triggered selling on several occasions. This confirms the weakness of the buyers and the control of the sellers over the market.
3. break of structure (BOS):
A break of structure (BOS) is clearly evident. The market has formed both lower highs and lower lows, which is typical of a downtrend. This structural break signals that buyers are no longer able to maintain control and sellers are determining the market movement.
4. consolidation below the FVG:
After the sell-off, the price consolidates in a narrow range below the fair value gap. This consolidation shows that the market is gathering energy to execute a further downward impulse. Without a return above the FVG area, the market remains strongly bearish.
5th target area (take profit zone):
A potential price target is marked at 2,528.47, which is close to a strong support zone. This area could be defined by previous lows or liquidity zones and serves as a potential target point for sellers.
6. market momentum:
The weak retracements to the upside and the structure of the chart indicate clear downward momentum. Buyers are currently showing no strength to initiate a sustained countermovement.
Conclusion:
XAUUSD is showing a clear bearish bias supported by the break of structure, fair value gap and Fibonacci resistances. As long as the price remains below the 50% retracement and the FVG, a further sell-off towards the support zone at 2,528.47 is to be expected. Traders should favor short setups and monitor potential reversal signals at the lower timeframes.
1. fair value gap incl. deep golden pocket (FVG):
The price has reached a fair value gap (FVG) incl. the cosequent encroachment and the deep golden pocket in the 2,717.53 area, which acts as resistance. Such untested liquidity areas are often used by sellers to take short positions. As long as the price remains below this area, selling pressure is likely to persist.
2nd Fibonacci retracement level:
The market is below the 50% Fibonacci retracement level (2,664.31), indicating a dominant downtrend. In addition, the area between the Fibonacci levels 0.705 (2,716.04) and 0.79 (2,737.48) is in a resistance zone that has already triggered selling on several occasions. This confirms the weakness of the buyers and the control of the sellers over the market.
3. break of structure (BOS):
A break of structure (BOS) is clearly evident. The market has formed both lower highs and lower lows, which is typical of a downtrend. This structural break signals that buyers are no longer able to maintain control and sellers are determining the market movement.
4. consolidation below the FVG:
After the sell-off, the price consolidates in a narrow range below the fair value gap. This consolidation shows that the market is gathering energy to execute a further downward impulse. Without a return above the FVG area, the market remains strongly bearish.
5th target area (take profit zone):
A potential price target is marked at 2,528.47, which is close to a strong support zone. This area could be defined by previous lows or liquidity zones and serves as a potential target point for sellers.
6. market momentum:
The weak retracements to the upside and the structure of the chart indicate clear downward momentum. Buyers are currently showing no strength to initiate a sustained countermovement.
Conclusion:
XAUUSD is showing a clear bearish bias supported by the break of structure, fair value gap and Fibonacci resistances. As long as the price remains below the 50% retracement and the FVG, a further sell-off towards the support zone at 2,528.47 is to be expected. Traders should favor short setups and monitor potential reversal signals at the lower timeframes.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.