Wyckoff Distribution in Phase B
Phase B: Testing Support and Resistance
The chart suggests that XAU/USD is in Phase B of the Wyckoff distribution. This phase is characterized by the market testing resistance and support zones. In this phase, institutions are absorbing demand before a major move.
BC (Buying Climax) and AR (Automatic Rally)
A significant Buying Climax (BC) has occurred, indicating a potential exhaustion of buying pressure, followed by an Automatic Rally (AR), marking the beginning of distribution. The chart also shows a Secondary Test (ST), where the market attempts to retest the BC level but fails to breach it convincingly.
SOW (Sign of Weakness) in Phase B
The price has dipped into the SOW in Phase B, indicating that downward pressure is building up as institutional traders prepare for a markdown phase.
Elliott Wave Structure
The chart outlines a detailed Elliott Wave count, suggesting that the market is in a corrective structure within a larger distribution phase.
Wave (A) and Wave (B) represent the initial stages of a correction, with Wave (B) completing at a potential Fibonacci retracement level (0.236, 0.34, or 0.382).
The progression of smaller subwaves within Wave (B) implies that the market may still experience minor upside moves before a stronger bearish move unfolds.
Institutional Manipulation: Wednesday Weekly Reversal Profile
The chart highlights a pattern of institutional manipulation, specifically a Wednesday Weekly Reversal.
Manipulation Tactics: The market consolidates Monday and Tuesday, driving prices higher into a premium zone to trigger buy-side liquidity, followed by a reversal on Wednesday. This implies a potential sell-off midweek, driven by institutional sellers capitalizing on trapped retail buyers.
How to Anticipate: The pattern suggests that if the market trades into a high timeframe resistance or intermediate-term high, a reversal should be expected, especially on or around Wednesday. This plays into the buy-side liquidity raid strategy.
Short-Term Price Action Expectations
Resistance and LPSY (Last Point of Supply):
The market is projected to test resistance near the BC distribution line. However, the multiple LPSY (Last Point of Supply) points in the future suggest that these are opportunities for institutions to distribute (sell) positions before a larger move down.
Invalidation Level:
If the price breaches the invalidation level near 2,643, the bearish outlook could be compromised. This level serves as a key pivot point for determining whether the bearish structure holds.
Fibonacci Retracement Levels
The chart shows important Fibonacci retracement levels at 0.236, 0.34, and 0.382. These are potential levels where a short-term retracement could occur before further downside pressure.
Summary of Forecast
Early Week (Monday-Tuesday): Expect consolidation and a potential move higher, targeting liquidity on the buy-side. The market may push into premium levels to induce more buy stops before reversing.
Mid-Week (Wednesday): Watch for a significant reversal on Wednesday, as highlighted by the Wednesday Weekly Reversal profile. This reversal could trigger institutional selling, driving the market lower into the latter part of the week.
End of Week (Thursday-Friday): The market may enter into a corrective move, with the possibility of testing lower levels, aligning with the Elliott Wave corrective structure (Wave (B)).
This analysis suggests a cautious outlook for XAU/USD, with potential bearish moves ahead as institutional players distribute positions in the current Wyckoff distribution phase. Traders should closely monitor mid-week price action for confirmation of a reversal.
Phase B: Testing Support and Resistance
The chart suggests that XAU/USD is in Phase B of the Wyckoff distribution. This phase is characterized by the market testing resistance and support zones. In this phase, institutions are absorbing demand before a major move.
BC (Buying Climax) and AR (Automatic Rally)
A significant Buying Climax (BC) has occurred, indicating a potential exhaustion of buying pressure, followed by an Automatic Rally (AR), marking the beginning of distribution. The chart also shows a Secondary Test (ST), where the market attempts to retest the BC level but fails to breach it convincingly.
SOW (Sign of Weakness) in Phase B
The price has dipped into the SOW in Phase B, indicating that downward pressure is building up as institutional traders prepare for a markdown phase.
Elliott Wave Structure
The chart outlines a detailed Elliott Wave count, suggesting that the market is in a corrective structure within a larger distribution phase.
Wave (A) and Wave (B) represent the initial stages of a correction, with Wave (B) completing at a potential Fibonacci retracement level (0.236, 0.34, or 0.382).
The progression of smaller subwaves within Wave (B) implies that the market may still experience minor upside moves before a stronger bearish move unfolds.
Institutional Manipulation: Wednesday Weekly Reversal Profile
The chart highlights a pattern of institutional manipulation, specifically a Wednesday Weekly Reversal.
Manipulation Tactics: The market consolidates Monday and Tuesday, driving prices higher into a premium zone to trigger buy-side liquidity, followed by a reversal on Wednesday. This implies a potential sell-off midweek, driven by institutional sellers capitalizing on trapped retail buyers.
How to Anticipate: The pattern suggests that if the market trades into a high timeframe resistance or intermediate-term high, a reversal should be expected, especially on or around Wednesday. This plays into the buy-side liquidity raid strategy.
Short-Term Price Action Expectations
Resistance and LPSY (Last Point of Supply):
The market is projected to test resistance near the BC distribution line. However, the multiple LPSY (Last Point of Supply) points in the future suggest that these are opportunities for institutions to distribute (sell) positions before a larger move down.
Invalidation Level:
If the price breaches the invalidation level near 2,643, the bearish outlook could be compromised. This level serves as a key pivot point for determining whether the bearish structure holds.
Fibonacci Retracement Levels
The chart shows important Fibonacci retracement levels at 0.236, 0.34, and 0.382. These are potential levels where a short-term retracement could occur before further downside pressure.
Summary of Forecast
Early Week (Monday-Tuesday): Expect consolidation and a potential move higher, targeting liquidity on the buy-side. The market may push into premium levels to induce more buy stops before reversing.
Mid-Week (Wednesday): Watch for a significant reversal on Wednesday, as highlighted by the Wednesday Weekly Reversal profile. This reversal could trigger institutional selling, driving the market lower into the latter part of the week.
End of Week (Thursday-Friday): The market may enter into a corrective move, with the possibility of testing lower levels, aligning with the Elliott Wave corrective structure (Wave (B)).
This analysis suggests a cautious outlook for XAU/USD, with potential bearish moves ahead as institutional players distribute positions in the current Wyckoff distribution phase. Traders should closely monitor mid-week price action for confirmation of a reversal.
Note
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.
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.