XAU/USD BEARISH BIAS
The hourly chart of XAU/USD provides a comprehensive look into the gold market’s current dynamics, emphasizing a bearish bias. The price trajectory is contained within a descending channel delineated by a blue line, signifying a robust bearish trend with sequential lower highs—a classic bearish market structure. Notably, the chart features defined supply and demand zones. The highlighted yellow regions indicate supply zones where previous peaks were formed, suggesting areas where potential selling pressure is likely to emerge. These zones are critical for traders as they often serve as strategic points for placing sell orders, expecting price rejection similar to past behaviors. Adjacent to these, a Fair Value Gap (FVG) identified on the chart suggests an area skipped by rapid price movements, indicating a potential inefficiency that might be targeted for price corrections or retracements. Directly above this gap, a smaller yellow zone, marked as a mitigation block (mSS), pinpoints where the market might seek to fill unmet sell orders. The directional arrows—first pointing upwards towards the mitigation block or upper supply zone, followed by a pronounced downward arrow—forecast a possible price action sequence. Initially, an upward move to retest critical levels, followed by a sharp reversal aligning with the dominant downtrend, suggests a scenario where traders could look for re-entry into the market post-retest, aiming to leverage the expected downward continuation to lower price levels or fresh lows. This approach is quintessential for traders using Smart Money tactics to anticipate and exploit potential market movements, ensuring entries and exits are strategically timed around key structural levels.
Chart Analysis:
Market Structure:
The market structure is primarily bearish as depicted by the descending blue trendline. The price making lower highs confirms a downward trend, adhering to a bearish market structure.
Key Zones:
Supply Zones (Yellow):
These are areas where potential selling pressure could be significant, suggesting that these levels have been respected in the past as strong rejection zones.
Demand Zone (Turquoise): This is identified as a potential area where buyers have historically shown interest, potentially leading to a price increase if reached.
Fair Value Gap (FVG):
The FVG noted on the chart indicates a price range that was swiftly passed through without significant trading, suggesting an inefficiency that could be targeted for a retracement or retest.
Mitigation Block (mSS):
This is highlighted as a smaller yellow zone above the FVG, indicating a more precise area where previous sellers might re-enter the market, aiming to mitigate any prior unfulfilled sell orders.
Forecast and Directional Movement:
First Arrow (Upward): This suggests an expectation of price moving upwards to retest the mitigation block or possibly the supply zone above, following the price action reaching or reacting within the FVG.
Second Arrow (Downward):
Post retest, the forecast anticipates a significant downward movement, breaking past the current lows and continuing the established bearish trend, potentially moving towards the next significant demand zone or a new low.
Trading Considerations:
A trader using this chart might look for entry signals at the retest of the FVG or the mitigation block, setting stop losses above the supply zones to manage risk. The main goal would be to capitalize on the expected downward movement after the retest is complete.
This analysis integrates market structure, key levels, and typical Smart Money trading behaviors to forecast future price movements and identify potential trading opportunities.
Chart Analysis:
Market Structure:
The market structure is primarily bearish as depicted by the descending blue trendline. The price making lower highs confirms a downward trend, adhering to a bearish market structure.
Key Zones:
Supply Zones (Yellow):
These are areas where potential selling pressure could be significant, suggesting that these levels have been respected in the past as strong rejection zones.
Demand Zone (Turquoise): This is identified as a potential area where buyers have historically shown interest, potentially leading to a price increase if reached.
Fair Value Gap (FVG):
The FVG noted on the chart indicates a price range that was swiftly passed through without significant trading, suggesting an inefficiency that could be targeted for a retracement or retest.
Mitigation Block (mSS):
This is highlighted as a smaller yellow zone above the FVG, indicating a more precise area where previous sellers might re-enter the market, aiming to mitigate any prior unfulfilled sell orders.
Forecast and Directional Movement:
First Arrow (Upward): This suggests an expectation of price moving upwards to retest the mitigation block or possibly the supply zone above, following the price action reaching or reacting within the FVG.
Second Arrow (Downward):
Post retest, the forecast anticipates a significant downward movement, breaking past the current lows and continuing the established bearish trend, potentially moving towards the next significant demand zone or a new low.
Trading Considerations:
A trader using this chart might look for entry signals at the retest of the FVG or the mitigation block, setting stop losses above the supply zones to manage risk. The main goal would be to capitalize on the expected downward movement after the retest is complete.
This analysis integrates market structure, key levels, and typical Smart Money trading behaviors to forecast future price movements and identify potential trading opportunities.
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.