Bearish Reversal Setup: Resistance Rejection Targeting Key Chart Overview:
Asset: Unspecified (likely XAU/USD or an index based on price levels)
Indicators:
EMA 50 (red) — currently around 3,306.84
EMA 200 (blue) — currently around 3,300.54
Key Zones:
Resistance Zone: ~3,320 to 3,360
Support Zone: ~3,190 to 3,240
Technical Analysis:
Trend Context:
The asset previously had a strong bullish run, peaking above 3,400.
After the peak, it shifted into a lower high structure, indicating potential distribution.
Price is currently fluctuating below the resistance zone but above the support zone, suggesting range-bound conditions.
Moving Averages (EMA Analysis):
The 50 EMA is currently below the 200 EMA, signaling short-term bearish pressure.
Price is hovering around these EMAs, suggesting indecision and the possibility of a breakout or breakdown.
Resistance Behavior:
Price is projected to retest the resistance zone (~3,340–3,360) before a major drop.
The resistance zone has already acted as a strong supply area multiple times, reinforcing its significance.
Support Expectation:
After rejection from the resistance zone, price is expected to decline sharply toward the support zone (~3,200).
The drawn arrows suggest an expectation of a rapid sell-off after the final fake-out at resistance.
Structure and Price Action:
The forecasted scenario shows a liquidity grab above resistance (fake breakout) followed by a strong bearish reversal.
This is typical in a "distribution phase" where market makers induce breakout traders before reversing the move.
Summary:
Primary Bias: Bearish
Setup: Short from resistance rejection after liquidity sweep.
Target: Support zone around 3,200.
Invalidation: A clean breakout and retest above the resistance zone (~3,360) would invalidate the bearish idea.
Risk Management: Ensure proper stop loss above resistance to mitigate risk in case of a genuine breakout.
