Gold Bearish Setup–Head & Shoulders Breakdown target 2990This 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)
