After a strong bullish rally, gold entered a corrective phase from the $4,480 high and is now ranging around $4,000, showing signs of buyer weakness and potential continuation of the correction.
Market Structure Shift (MSS):
A clear MSS occurred near $4,050, signaling a short-term shift in control from buyers to sellers. Price retested the supply zone briefly before facing renewed selling pressure.
Supply Zone:
The $4,040–$4,060 area acts as a short-term supply zone where multiple upper-wick candles show strong selling interest.
Key Support:
Major support lies between $3,880–$3,920, previously the base of a strong bullish move. This zone also represents a liquidity area, with many stop-losses likely resting below.
Scenario:
Below $4,050, bearish pressure may push price back toward $3,880. A break below this level could extend the decline to $3,750.
However, a clear breakout above $4,060 would shift structure back to bullish.
Summary:
- Structure: Short-term bearish
- Resistance: $4,040–$4,060
- Support: $3,880–$3,920
- Main Scenario: Downward correction toward support
- Alternative: Break above $4,060 → bullish reversal
Learn more about Falling Wedge Pattern in Forex: A Complete Guide for Traders
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