“The Art of Traps: Understanding Fake Breakouts in XAUUSD”“The Art of Traps: Understanding Fake Breakouts in XAUUSD”
This chart illustrates how gold (XAUUSD) is currently navigating a critical battle between resistance and support.
At the top, the resistance zone (3440–3460) has already shown signs of rejection, hinting at a possible fake breakout scenario. Such traps are common in financial markets—they draw traders into buying late, only for price to reverse and capture liquidity.
On the downside, the chart highlights two important stages:
The first target lies around 3400, where short-term buyers may start taking profits.
The final target sits at the key support zone (3330–3320), which has acted as a structural backbone in past moves. If this level holds, we can expect another bullish leg; if broken, deeper downside pressure could unfold.
The sequence of higher lows in recent weeks demonstrates strength in the broader trend, but it also warns that markets are building energy before a larger move. Liquidity sweeps (marked in the chart) serve as reminders that price does not move randomly—it often seeks zones where orders are concentrated.
🔑 Educational Takeaway:
Trading is not just about spotting breakouts; it’s about understanding whether those moves are genuine or deceptive. By studying price behavior at resistance and support, traders can avoid falling into liquidity traps and position themselves with the “smart money.”
