XAUUSD: Bearish momentum remains strong on the chart!

16 hours ago

The XAU/USD chart on the 4-hour timeframe presents a clear technical picture of the current trend. The price recently hit strong resistance at 2,697 and faced rejection, signaling a potential downside correction. Fibonacci retracement levels, particularly 0.5 at 2,677 and 0.618 at 2,672, are acting as significant resistance zones where price reactions may continue. The market structure also highlights notable changes with "Change of Character" (CHOCH) signals, emphasizing that sellers are gradually gaining control as the price forms lower highs.

In this context, the main scenario suggests that the price could decline towards the support level around 2,645 before potentially moving deeper into the strong demand zone at 2,620. However, before the deeper drop, the price may slightly retrace to retest the recently broken support, offering short-selling opportunities. This scenario is further supported by the bearish divergence on the RSI indicator, which shows weakening bullish momentum despite higher price peaks, indicating a possible reversal.

That said, traders should carefully monitor price action at key support levels and observe the RSI indicator to identify oversold conditions, reducing the risk of sharp price retracements. With the current market structure, waiting for a confirmed breakdown below 2,657 could provide more reliable signals to enter short positions. If necessary, you may adjust your trading scenario to better align with actual market movements.

Happy trading, and may your trades be profitable!

11 hours ago

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