In this chart, the gold price on the 4-hour timeframe shows that after a strong bullish rally, the market has entered a corrective phase. The break of the bullish structure and the move toward the 1H imbalance zone (FVG – 1H) indicate that the market is currently filling inefficiencies, and this correction could extend toward lower liquidity levels. The recent sharp bearish candles suggest increasing selling pressure in the short term.
At this stage, the price reaction to the FVG – 1H zone becomes crucial. If the price stabilizes after tapping into this area and forms signs of reversal, the probability of a new bullish rally increases. In a bullish scenario, the market could initially retrace upward, then break through supply zones, and continue toward the 4H imbalance (FVG – 4H) and even higher levels. This path aligns with the higher-low and higher-high structures visible on the chart.
However, if the FVG – 1H support fails, the price may extend downward toward lower levels, potentially retesting the major lows near the 3900 zone. This scenario typically occurs when the market seeks additional liquidity or when sellers dominate the trend. A break below this zone could open space for a deeper correction and shift the overall structure toward a bearish trend.
Overall, the current region is a key decision point for the future direction of gold. The price reaction here will determine the next short-term and mid-term movement. Therefore, traders should wait for strong confirmation from price action to identify the more probable scenario.
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