š Market Structure Overview (XAU/USD)
Your chart shows Gold (XAUUSD) on what appears to be a short-term timeframe (likely M15 or M30). Price is currently sitting on a rising trendline but showing weakness.
š Key Observations
1. Price Inside a Consolidation Zone
- The purple rectangular box shows a supply/resistance zone where multiple sell signals appeared.
- Price keeps rejecting this zone, indicating strong sellers above.
2. Trendline Weakness
- Price is currently breaking below the blue rising trendline.
- Candles show bearish pressure with smaller bullish corrections.
This suggests the trendline is losing strength.
3. Two Possible Scenarios (as You Drew)
š Scenario 1: Bearish Breakdown (More Likely)
If the price:
- Breaks the trendline cleanly
- Retests it as resistance
Then a downward move is expected.
Your marked red zone shows a sell entry, targeting the large green zone below.
Reason:
- Multiple rejections from supply
- Bearish structure forming
- Trendline failure
š Scenario 2: Bullish Rebound (Less Likely but Possible)
Price may:
- Bounce from the lower boundary of the purple zone
- Reclaim the trendline
- Break the consolidation resistance
Then it can continue upward toward the large green target zone at the top.
This requires a strong bullish candle close above resistance.
šÆ Risk-to-Reward (1:2)
Your RR ratio is correct.
Both setups (buy and sell) have approx. 1:2 RR, which is good risk management.
š Summary
Market is currently in a decision zone.
Bearish setup is stronger at the moment due to trendline weakness and repeated rejections.
Bullish setup only valid if price breaks and closes above the purple resistance zone.
