XAU/USD – Bearish Head and Shoulders Breakdown on 30-Minute Chart
🔍 Pattern Overview
The chart presents a Head and Shoulders pattern, one of the most reliable classic reversal formations in technical analysis. This pattern typically forms after an extended uptrend and signals a potential shift in momentum from bullish to bearish.
In this case, the Head and Shoulders has developed cleanly with:
Left Shoulder: A sharp rise in price followed by a moderate decline.
Head: A higher peak than the left shoulder, forming the top of the pattern.
Right Shoulder: A lower high, aligning approximately with the left shoulder level.
The neckline (support zone) was tested multiple times and eventually broken, confirming the bearish breakdown.
📈 Price Structure & Key Technical Levels
Left Shoulder High: Around 3,420.075
Head High: Approximately 3,520.000
Right Shoulder High: Roughly matches left shoulder, confirming pattern symmetry.
Neckline / Support Zone: Ranges between 3,335 and 3,340, tested repeatedly.
Breakout Confirmation: Occurs as price decisively breaks below the neckline.
Retest Area: After the breakout, price retests the broken support, now acting as resistance—textbook bearish confirmation.
🎯 Trade Setup
This setup offers a well-structured short opportunity based on pattern analysis and disciplined risk management.
✅ Entry Point:
After the neckline breakdown and successful retest, around the 3,350 level.
🎯 Target (TP):
Set at 3,279.809, derived using the measured move technique:
Height from head to neckline is projected downward from the breakout point.
This target aligns with historical price congestion, adding further confluence.
❌ Stop Loss (SL):
Placed above the right shoulder at 3,420.075.
This level invalidates the pattern if breached, protecting the trade from further losses.
🔄 Expected Price Action Path
Breakdown from neckline support.
Minor bullish pullback to retest former support as resistance.
Bearish continuation toward projected target.
Potential minor consolidation near TP due to historical support demand zone.
This projection is visually represented with blue arrows on the chart.
🔎 Additional Notes and Confluence Factors
Volume (if included): Typically, volume should increase on the breakdown of the neckline to confirm strength. Traders may want to check for volume spikes during the breakout.
Bearish Momentum Indicators (e.g., RSI or MACD): Would ideally show divergence or bearish crossover for added confirmation.
Trend Reversal Context: This formation occurs after a prolonged bullish rally, suggesting a potential medium-term bearish reversal rather than just a short-term retracement.
📘 Summary
This chart offers a clear example of a textbook Head and Shoulders reversal pattern playing out on the 30-minute timeframe for XAU/USD. The structure is well-formed, the neckline is clearly broken and retested, and the projected target aligns with price action logic. The setup provides a high-probability short opportunity for traders with disciplined risk management and a sound technical rationale.
🛡️ Risk Management Reminder
As always, no pattern is guaranteed. Use proper position sizing and risk control to manage your trade. Monitor economic news releases or sudden market catalysts that may impact gold volatility.
🔍 Pattern Overview
The chart presents a Head and Shoulders pattern, one of the most reliable classic reversal formations in technical analysis. This pattern typically forms after an extended uptrend and signals a potential shift in momentum from bullish to bearish.
In this case, the Head and Shoulders has developed cleanly with:
Left Shoulder: A sharp rise in price followed by a moderate decline.
Head: A higher peak than the left shoulder, forming the top of the pattern.
Right Shoulder: A lower high, aligning approximately with the left shoulder level.
The neckline (support zone) was tested multiple times and eventually broken, confirming the bearish breakdown.
📈 Price Structure & Key Technical Levels
Left Shoulder High: Around 3,420.075
Head High: Approximately 3,520.000
Right Shoulder High: Roughly matches left shoulder, confirming pattern symmetry.
Neckline / Support Zone: Ranges between 3,335 and 3,340, tested repeatedly.
Breakout Confirmation: Occurs as price decisively breaks below the neckline.
Retest Area: After the breakout, price retests the broken support, now acting as resistance—textbook bearish confirmation.
🎯 Trade Setup
This setup offers a well-structured short opportunity based on pattern analysis and disciplined risk management.
✅ Entry Point:
After the neckline breakdown and successful retest, around the 3,350 level.
🎯 Target (TP):
Set at 3,279.809, derived using the measured move technique:
Height from head to neckline is projected downward from the breakout point.
This target aligns with historical price congestion, adding further confluence.
❌ Stop Loss (SL):
Placed above the right shoulder at 3,420.075.
This level invalidates the pattern if breached, protecting the trade from further losses.
🔄 Expected Price Action Path
Breakdown from neckline support.
Minor bullish pullback to retest former support as resistance.
Bearish continuation toward projected target.
Potential minor consolidation near TP due to historical support demand zone.
This projection is visually represented with blue arrows on the chart.
🔎 Additional Notes and Confluence Factors
Volume (if included): Typically, volume should increase on the breakdown of the neckline to confirm strength. Traders may want to check for volume spikes during the breakout.
Bearish Momentum Indicators (e.g., RSI or MACD): Would ideally show divergence or bearish crossover for added confirmation.
Trend Reversal Context: This formation occurs after a prolonged bullish rally, suggesting a potential medium-term bearish reversal rather than just a short-term retracement.
📘 Summary
This chart offers a clear example of a textbook Head and Shoulders reversal pattern playing out on the 30-minute timeframe for XAU/USD. The structure is well-formed, the neckline is clearly broken and retested, and the projected target aligns with price action logic. The setup provides a high-probability short opportunity for traders with disciplined risk management and a sound technical rationale.
🛡️ Risk Management Reminder
As always, no pattern is guaranteed. Use proper position sizing and risk control to manage your trade. Monitor economic news releases or sudden market catalysts that may impact gold volatility.
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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.
Related publications
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.