š Overall Market Context
The chart shows GOLD (XAUUSD) on the 1-hour timeframe, and the structure appears to be in a downtrend. The market has been forming lower highs and lower lows, respecting a descending trendline.
š¹ Key Observations
1. Descending Trendline (Bearish Structure)
- You have drawn a downward sloping trendline connecting recent highs.
- Price is still respecting this trendline, showing sellers remain in control.
2. Support Zone Retest
- Price is hovering around a horizontal support zone (marked in pink).
- Multiple candles are failing to close strongly above the zone ā weak bullish pressure.
3. Recent Pullback Looks Corrective
- The upward moves are small and corrective, while downward legs are impulsive ā typical bearish momentum.
4. Bearish Breakout Setup
- You marked an entry below support, with a large risk-reward toward the next major support below.
- The idea:
ā Break and close below the pink zone
ā Retest
ā Continue down to the lower purple support line
Your arrow suggests you’re expecting the breakdown to continue.
š» Bearish Confirmation Signals
These signals support your short idea:
- Price failing to break above moving averages (orange and blue lines).
- Lower highs forming at the trendline.
- Support zone getting weaker with repeated tests.
- A long downside wick already penetrated the zone ā early liquidity grab before the real drop.
š Expected Move
If price breaks and closes below the support zone:
ā”ļø Expect a drop toward the next major support (bottom purple line).
ā”ļø This aligns with your marked short trade idea.
š What to Watch Next
- A strong bearish candle breaking support.
- No immediate strong bullish engulfing near the zone.
- Retest of the broken support turning into resistance.
