This setup on the 1-hour chart of XAUUSD presents a head and shoulders pattern, which is a well-known reversal formation indicating a potential bearish move.
Key Observations:
1. Head and Shoulders Formation
- The left shoulder, head, and right shoulder are clearly marked.
- The neckline of the pattern has already been broken, confirming the bearish bias.
- Price is currently retesting the neckline, which often acts as resistance after a breakout.
2. Sell Entry Zone (3028 Region)
- The marked sell entry is positioned around 3028, which aligns with the neckline retest.
- If price rejects this level, it confirms seller dominance and increases the probability of a continuation downward.
- A strong rejection candle at this level could be a good confirmation to enter a short position.
3. Bearish Targets:
- First Target: 3004
- This level represents a strong demand zone where buyers previously stepped in.
- A reaction may occur here, but if momentum remains bearish, price could continue lower.
- Second Target: 2988
- This is a deeper support area where price could head if selling pressure remains strong.
- This level aligns with previous liquidity zones and a key structure support area.
Bearish Confirmation Signals to Watch:
- Rejection candles (wicks, bearish engulfing, or pin bars) at 3028
- Break of minor support levels with strong volume
- Failure of buyers to reclaim the neckline zone (3028 region)
Invalidation of Bearish Bias:
- If gold closes above 3028 and sustains above this level, it could invalidate the bearish setup.
- A break above the right shoulder zone would signal potential bullish continuation.
Sell Entry: Around 3028 (Neckline Retest)
First Target: 3004 (Initial Support Zone)
Second Target: 2988 (Major Support Level)
Key Observations:
1. Head and Shoulders Formation
- The left shoulder, head, and right shoulder are clearly marked.
- The neckline of the pattern has already been broken, confirming the bearish bias.
- Price is currently retesting the neckline, which often acts as resistance after a breakout.
2. Sell Entry Zone (3028 Region)
- The marked sell entry is positioned around 3028, which aligns with the neckline retest.
- If price rejects this level, it confirms seller dominance and increases the probability of a continuation downward.
- A strong rejection candle at this level could be a good confirmation to enter a short position.
3. Bearish Targets:
- First Target: 3004
- This level represents a strong demand zone where buyers previously stepped in.
- A reaction may occur here, but if momentum remains bearish, price could continue lower.
- Second Target: 2988
- This is a deeper support area where price could head if selling pressure remains strong.
- This level aligns with previous liquidity zones and a key structure support area.
Bearish Confirmation Signals to Watch:
- Rejection candles (wicks, bearish engulfing, or pin bars) at 3028
- Break of minor support levels with strong volume
- Failure of buyers to reclaim the neckline zone (3028 region)
Invalidation of Bearish Bias:
- If gold closes above 3028 and sustains above this level, it could invalidate the bearish setup.
- A break above the right shoulder zone would signal potential bullish continuation.
Sell Entry: Around 3028 (Neckline Retest)
First Target: 3004 (Initial Support Zone)
Second Target: 2988 (Major Support Level)
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t.me/+JLFlD0eg3LFjNjU8
📞TELEGRAM ME
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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.