🟡 XAU/USD 1H – Bearish Setup: Rising Wedge Breakdown with Double Top Near Key Resistance
Timeframe: 1-Hour (H1)
Pair: XAU/USD – Gold Spot vs. US Dollar
Market Sentiment: Bearish Reversal Setup
Pattern Observed: Rising Wedge + Double Top Formation
Trade Bias: Short (Sell) Setup
🧭 1. Market Structure & Trend Analysis
The market has been in a strong uptrend, characterized by a sequence of higher highs and higher lows. This bullish rally originated from the support zone between $3,020 – $3,035, where bulls stepped in aggressively, creating a solid price floor.
As price continued to rally, momentum began to wane near a significant resistance level around $3,243, which has previously acted as a price ceiling. This is a natural area where sellers regain control after bullish exhaustion.
📊 2. Technical Pattern Breakdown
🔺 A. Rising Wedge Pattern
A rising wedge pattern formed during the recent price climb.
Defined by two converging trendlines, with higher highs and higher lows narrowing over time.
This pattern often signals a bearish reversal, especially when it forms after an extended bullish trend.
As the price approached the upper wedge resistance, bullish candles became smaller, indicating weakening momentum.
⛰️ B. Double Top Structure
Just before breaking down, price formed a Double Top pattern, also known as an “M-formation”.
Both peaks occurred around the $3,243 resistance, reinforcing it as a strong rejection zone.
The second top failed to push higher than the first — a clear sign of bullish exhaustion.
The neckline of the double top coincides with the wedge support, providing confluence for the breakdown.
📉 3. Bearish Reversal & Entry Strategy
Following the formation of these patterns, price broke down decisively below the rising wedge’s lower support trendline. This confirms a shift in momentum from bullish to bearish.
🔔 Entry Signal:
Enter short positions after confirming the wedge breakdown, ideally around $3,215 – $3,210 for a safer entry with lower risk.
🎯 4. Target & Risk Management Strategy
🎯 Take-Profit (TP) Levels:
TP1: $3,182
This is the nearest liquidity pocket and a minor support zone where price may bounce.
It aligns with previous intraday consolidation zones.
🛡️ Stop Loss (SL):
SL: $3,243.5
Above the second top and horizontal resistance.
Protects against fakeouts or retests of the previous highs.
📐 Risk-Reward Ratio:
Approx. RR = 2:1 or higher, offering a favorable trading opportunity.
🔎 5. Additional Technical Insights
Volume Analysis (if available): Typically, volume diminishes during wedge formation and spikes at the breakout point — confirming the breakdown.
EMA/SMA Filters: Traders may enhance this setup by confirming bearish crossovers using the 20/50 EMA (not shown but can be applied).
Trendline Validity: Multiple touchpoints on the wedge boundaries strengthen the pattern’s reliability.
⚠️ 6. Key Levels to Watch
Level Description
$3,243.5 Resistance / Double Top High
$3,210.0 Breakdown / Entry Area
$3,182.0 Take-Profit (TP) Zone
$3,035.0 Strong Previous Support
🗣️ 7. Summary & Trading Plan
This chart highlights a textbook bearish reversal setup after a strong uptrend. The combination of a Rising Wedge and a Double Top pattern provides high-probability confirmation for a potential retracement.
✅ If you're a short-term trader or scalper, this 1H timeframe offers clean technical structure and clear invalidation levels.
📉 If you’re a swing trader, consider monitoring lower timeframes for micro pullbacks after entry.
Timeframe: 1-Hour (H1)
Pair: XAU/USD – Gold Spot vs. US Dollar
Market Sentiment: Bearish Reversal Setup
Pattern Observed: Rising Wedge + Double Top Formation
Trade Bias: Short (Sell) Setup
🧭 1. Market Structure & Trend Analysis
The market has been in a strong uptrend, characterized by a sequence of higher highs and higher lows. This bullish rally originated from the support zone between $3,020 – $3,035, where bulls stepped in aggressively, creating a solid price floor.
As price continued to rally, momentum began to wane near a significant resistance level around $3,243, which has previously acted as a price ceiling. This is a natural area where sellers regain control after bullish exhaustion.
📊 2. Technical Pattern Breakdown
🔺 A. Rising Wedge Pattern
A rising wedge pattern formed during the recent price climb.
Defined by two converging trendlines, with higher highs and higher lows narrowing over time.
This pattern often signals a bearish reversal, especially when it forms after an extended bullish trend.
As the price approached the upper wedge resistance, bullish candles became smaller, indicating weakening momentum.
⛰️ B. Double Top Structure
Just before breaking down, price formed a Double Top pattern, also known as an “M-formation”.
Both peaks occurred around the $3,243 resistance, reinforcing it as a strong rejection zone.
The second top failed to push higher than the first — a clear sign of bullish exhaustion.
The neckline of the double top coincides with the wedge support, providing confluence for the breakdown.
📉 3. Bearish Reversal & Entry Strategy
Following the formation of these patterns, price broke down decisively below the rising wedge’s lower support trendline. This confirms a shift in momentum from bullish to bearish.
🔔 Entry Signal:
Enter short positions after confirming the wedge breakdown, ideally around $3,215 – $3,210 for a safer entry with lower risk.
🎯 4. Target & Risk Management Strategy
🎯 Take-Profit (TP) Levels:
TP1: $3,182
This is the nearest liquidity pocket and a minor support zone where price may bounce.
It aligns with previous intraday consolidation zones.
🛡️ Stop Loss (SL):
SL: $3,243.5
Above the second top and horizontal resistance.
Protects against fakeouts or retests of the previous highs.
📐 Risk-Reward Ratio:
Approx. RR = 2:1 or higher, offering a favorable trading opportunity.
🔎 5. Additional Technical Insights
Volume Analysis (if available): Typically, volume diminishes during wedge formation and spikes at the breakout point — confirming the breakdown.
EMA/SMA Filters: Traders may enhance this setup by confirming bearish crossovers using the 20/50 EMA (not shown but can be applied).
Trendline Validity: Multiple touchpoints on the wedge boundaries strengthen the pattern’s reliability.
⚠️ 6. Key Levels to Watch
Level Description
$3,243.5 Resistance / Double Top High
$3,210.0 Breakdown / Entry Area
$3,182.0 Take-Profit (TP) Zone
$3,035.0 Strong Previous Support
🗣️ 7. Summary & Trading Plan
This chart highlights a textbook bearish reversal setup after a strong uptrend. The combination of a Rising Wedge and a Double Top pattern provides high-probability confirmation for a potential retracement.
✅ If you're a short-term trader or scalper, this 1H timeframe offers clean technical structure and clear invalidation levels.
📉 If you’re a swing trader, consider monitoring lower timeframes for micro pullbacks after entry.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.