On the 1-hour timeframe of Gold (XAU/USD), the market has been moving within a corrective phase over the past few sessions, showing signs of shifting momentum between buyers and sellers. A closer look at price behavior around key levels can help identify the market’s next direction.
1. Break of Structure (BoS)
In the early part of the Gold chart, after a bullish movement, the market entered a correction phase. However, with the formation of a demand zone (highlighted in green) and a subsequent breakout above the previous high, a bullish Break of Structure (BoS) was confirmed.
This indicates that buyers regained control, injecting new liquidity into the market and pushing prices higher.
2. Price Return to Supply Zone
Following the bullish push, the price reacted sharply upon reaching the supply zone (marked in red). This area had previously triggered a downward move, making it a significant supply level where sellers are likely to become active again.
Currently, the market is retesting this zone, and the reaction here will be critical in determining whether the bullish move continues or a reversal begins.
3. Key Level Analysis
The red zone lies approximately between $3,885 and $3,895.
- If price fails to close above this area, a short-term correction toward $3,860 or $3,840 is likely.
- Conversely, if the market breaks and closes firmly above $3,895, it could open the way for further bullish continuation toward $3,915–$3,930.
4. Demand Zone and Stop-Loss Area
The green zone represents the demand area where buyers previously stepped in aggressively.
- If price retraces back, the zone between $3,830 and $3,850 is expected to act as a strong support level.
- For potential long positions, a logical stop-loss would be placed below $3,820.
5. Summary
The medium-term trend remains neutral to bullish.
- The red zone (3,885–3,895) is the critical supply area, where rejection could trigger a downside move.
- The green zone (3,830–3,850) remains a key demand area for potential long entries.
- A confirmed breakout or rejection from the red zone will likely determine the market’s next major direction in the coming sessions.
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