Why We Would Sell (Short) XAUUSD in This Setup:
Strong Resistance Zone:
Price is approaching a clear resistance level around 3,250, marked by multiple rejections in the past.
This zone acted as a ceiling for the bulls — each time price reached this level, it got pushed back down, showing strong selling pressure.
Double Top Formation (Potential Reversal Pattern):
The price formed a potential double top near 3,250.
This pattern often signals a shift from bullish to bearish momentum.
Bearish Rejection Wicks:
Candlesticks near the resistance show long upper wicks, indicating that buyers are getting weak and sellers are stepping in.
Lower High Forming:
After the second peak, price failed to make a new high, suggesting buying momentum is weakening.
The current price action is forming a lower high, which is a bearish signal.
Bearish Price Projection (Arrow Path):
The blue arrow suggests a retest of the resistance zone followed by a strong drop down to the support zone at 3,187.
This offers a good risk-to-reward ratio for a short trade setup.
Trade Parameters:
Stop Loss above resistance (around 3,250).
Take Profit around 3,187 (previous support).
This setup offers a clear invalidation point if the price breaks above resistance.
Strong Resistance Zone:
Price is approaching a clear resistance level around 3,250, marked by multiple rejections in the past.
This zone acted as a ceiling for the bulls — each time price reached this level, it got pushed back down, showing strong selling pressure.
Double Top Formation (Potential Reversal Pattern):
The price formed a potential double top near 3,250.
This pattern often signals a shift from bullish to bearish momentum.
Bearish Rejection Wicks:
Candlesticks near the resistance show long upper wicks, indicating that buyers are getting weak and sellers are stepping in.
Lower High Forming:
After the second peak, price failed to make a new high, suggesting buying momentum is weakening.
The current price action is forming a lower high, which is a bearish signal.
Bearish Price Projection (Arrow Path):
The blue arrow suggests a retest of the resistance zone followed by a strong drop down to the support zone at 3,187.
This offers a good risk-to-reward ratio for a short trade setup.
Trade Parameters:
Stop Loss above resistance (around 3,250).
Take Profit around 3,187 (previous support).
This setup offers a clear invalidation point if the price breaks above resistance.
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.