Lingrid | GOLD Weekly MARKET OUTLOOK

May 26

Last week was a tough period for gold, marked by a sharp reversal where the bull's momentum suddenly gave way to a bearish surge. The bull takes the stairs, the bear jumps out the window as they say. The sudden correction was not a surprise, but rather a necessary step in the market's attempt to rebalance itself. The price had been forming a divergence for some time, and when it finally broke above the resistance level at 2450, the pullback was triggered. The ensuing free fall took out multiple support levels, including the upward channel that had held sway for over two months. This break is a clear indication that the correction is likely to be deeper than initially anticipated. Interestingly, we've seen a similar scenario play out before - in May 2023, the market experienced a similar correction, only to recover and form a bearish divergence in the subsequent months.



Reviewing the monthly timeframe from last year, we notice a pattern of two candles with long tails, followed by a decline. Fast-forward to the current month, April has already formed a candle with a long tail, and May is following suit. This recurring pattern suggests a probability of further market decline. On the 4H timeframe, we're seeing a bearish momentum unfold. Based on this overview, I think the market might fall to the psychological level of 2300. If it breaks below this level, the next support zone would be at 2350 - 2380.


Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻

May 26

Note

*the next support zone would be at 2250 - 2280

May 27

Note

Our current focus is on identifying the optimal entry point within the zone formed between 2350 and 2375. As we can see, the XAUUSD is currently slowing down after experiencing a bearish momentum, which is likely to lead to a pullback. I think that the optimal entry zone for shorting the market is around the 2370 level, as it has been respected each time it approached in the past. Today there are no high-impact news on the horizon, therefore I expect rather a sideways movement. If the market makes an impulsive move upwards and breaks through the lower border of the channel, closing above it, I would consider it a potential fake breakout. Conversely, if the market rejects this level, it would serve as a confirmation signal to initiate a short position. My goal for the next days is key support level at 2300.

May 28

Note

The gold price has reached the resistance zone, where we've previously seen sell-offs. As expected, the market has formed a retracement, moving higher in a corrective move. However, we might see a two-legged pullback, which would provide an ideal opportunity to go short. The price has tested the resistance level at 2350, only to rebound and continue its downward momentum. Looking ahead, I expect the market to move downward due to the bearish flag pattern being broken through. Furthermore, the long tail bar on the 4H timeframe indicates significant sell pressure. Given these factors, I expect the price to retest the psychological level below 2300 and potentially moving even lower. My goal is the support level around 2310

May 29

Note

The market has recently pulled back into the entry zone, only to be rejected by the resistance level twice. This failure to break through the resistance suggests that the current trend is shifting to downward. Furthermore, the presence of a downward trendline that has acted as both support and resistance has repeatedly contained the price's upward momentum. I think that the market is now poised to retest recent support levels, unless an upcoming news event significantly changes the market's direction. The recent fake breakout of the 2350-2360 zone also indicates that the bulls lack the strength to push the price to new highs. As a result, I expect the price to move lower, potentially breaking through the previous week's low. My goal is the support level at around 2312.

May 30

Note

The market is still consolidating following the recent bearish move, and the price action is currently forming a head and shoulders pattern. As you can see, the left shoulder and head have already been established. The price is currently testing the neckline, which coincides with the lower border of the channel. On the 4H timeframe, a potential reversal candle is forming at the support level, which could be a short-term pullback from the bottom of the range zone. If the price breaks through the neckline, we can anticipate another impulse leg down to around 2280. Overall, I expect the market to narrow its price range in order to form a triangle shape formation before continuing its current trend. My goal is support level at 2290

May 31

Note

The price perfectly fulfilled my previous idea. It went up to entry zone and rebounded from it. The market's recent consolidation after its bearish momentum has been annoyingly steady. Despite this, the price action has created a distinctive equal lows and lower highs, which suggests a compression channel is forming. Given the importance of closing the monthly candle, I expect the market to remain stuck in neutral today, likely trading sideways. However, if the market can push past the key resistance level at 2350, I believe we may see a reversal, potentially leading to another lower high as the price corrects itself. My goal is support level at 2323.

Jun 2

Trade closed: target reached

The price played out nicely 🤑