XAUUSD: ABC Correction Target 4240XAUUSD: ABC correction may extend toward 4240 while broader pressure still points lower
Hello everyone, here is my view on the current XAUUSD setup.
Market Analysis
Gold is showing signs of entering a deeper corrective phase after failing to hold near the upper part of the recent rising channel. On the chart, price completed a strong push higher, but the rejection from the top zone suggests that upside momentum is fading and the market may now be shifting into an ABC corrective structure.
At the moment, the key area to watch is the 4580–4600 sell zone, where price is currently reacting. This region acts as overhead resistance and may become the origin of the next downside leg if sellers continue to defend it. The structure on the right side of the chart suggests that gold may first develop a short rebound, then form another lower high before extending into the final C leg.
The first important support sits around the 4480–4490 liquidity buy zone. If this area fails to hold on the next bounce sequence, the downside path may open further toward the 4240 target zone, which is clearly marked on the chart as the main objective of the ABC correction.
From a broader perspective, the bigger concern is that this decline may not stop there if bearish pressure continues to build. While 4240 is the main near-term target of the current corrective structure, the longer-term chart still leaves room for a much deeper extension toward the 3901 region if gold remains under pressure and cannot rebuild a stronger bullish base.
So for now, the market appears to be transitioning from an impulsive rise into a corrective downside phase, with the ABC path favoring further weakness unless price can reclaim the key resistance zone above.
Key Price Areas to Watch
Current reaction zone: around 4580–4600
Sell zone / overhead resistance: 4580–4600
Liquidity buy zone: around 4480–4490
Main ABC downside target: 4240
Longer-term bearish extension: 3901
My Scenario & Strategy
My preferred scenario is to treat the current structure as an ABC correction, with gold still vulnerable to another leg lower.
As long as price remains below the 4580–4600 sell zone, I continue to favor a bearish continuation view. A weak rebound into resistance followed by fresh rejection would support the idea of the market moving down toward 4240 as the next major target.
If bearish momentum remains strong even after reaching that zone, then the broader long-term structure may continue pointing toward 3901, which becomes the deeper downside level to watch.
However, if gold reclaims the sell zone and starts holding above it with stronger candles, the current ABC bearish path would weaken and the market could shift into a more stable recovery phase.
That’s the setup I’m watching for now. Thank you for reading, and always manage your risk carefully.
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