Gold (XAU/USD) has been trading within a tightening consolidation range over the past several sessions, characterized by lower highs and a horizontal support level. This behavior has resulted in the formation of a descending triangle, which is commonly interpreted as a bearish continuation pattern—especially when occurring in a downtrend.
Following a failed attempt to sustain above the $3,400 level, price action has steadily weakened, showing signs of bearish pressure. Recent structure breakdown below the triangle’s lower boundary suggests that the bulls are losing control, opening the door for a potential leg down.
🔍 Technical Structure Breakdown
📐 Triangle Pattern
Formation Type: Descending Triangle
Support Level: ~$3,245
Lower Highs Resistance: Downward sloping line, showing consistent bearish pressure.
Breakdown Confirmation: Clear move below triangle support, followed by a retest and rejection, confirming bearish momentum.
🔄 Key Support & Resistance
Resistance Zone: $3,300–$3,340
This area has acted as a supply zone, where sellers continue to overpower buying attempts. The price has failed multiple times to break above this region, creating a solid resistance cap.
Support Level (Previous Base of Triangle): $3,245
Price repeatedly bounced off this level before the final breakdown, making it a significant level for validation of the pattern.
Next Key Support/Target: $3,155
The projected move is derived by measuring the height of the triangle and subtracting it from the breakout point. This target also aligns with a previous demand zone, increasing its relevance.
➰ Black Curve Line (Dynamic Resistance)
This curved resistance line adds further technical weight to the downtrend. It’s a visual cue of how momentum is progressively shifting downward. The curve reflects a deceleration in bullish effort, a warning signal often preceding breakdowns.
⚙️ Trade Plan: Bearish Bias
Component Level
Entry Zone $3,265–$3,270 (retest of breakdown)
Stop Loss $3,317 (above triangle and curve line)
Take Profit $3,155
Risk-Reward Ratio: ~2.5:1 (based on entry near $3,270, SL $3,317, TP $3,155)
Setup Type: Breakdown + Retest (high-probability pattern continuation setup)
⚠️ Risk Management & Confirmation Factors
Confirmation Needed: A clean hourly candle close below the support zone, followed by rejection wicks on retest, strengthens the case for short entries.
Invalidation: A strong bullish break above $3,317 (stop level) invalidates this setup and could signal a reversal or false breakdown.
Volatility Note: Be mindful of macroeconomic events or FOMC-related headlines that may trigger increased volatility in precious metals.
📊 Conclusion & Trader Sentiment
The descending triangle in gold is a textbook example of consolidation under pressure. With sellers continuously pushing price into lower highs while buyers cling to horizontal support, the eventual outcome often favors the dominant trend—which in this case is bearish.
The current structure offers a clean technical setup for short traders with well-defined risk levels and a logical downside target. As always, ensure strict adherence to risk management principles and stay aware of market news that could impact gold volatility.
📌 Tag Ideas:
#XAUUSD #GoldAnalysis #TrianglePattern #BreakdownSetup #TechnicalAnalysis #PriceAction #BearishTrade #MetalsTrading #ShortSetup #ForexIdeas
Following a failed attempt to sustain above the $3,400 level, price action has steadily weakened, showing signs of bearish pressure. Recent structure breakdown below the triangle’s lower boundary suggests that the bulls are losing control, opening the door for a potential leg down.
🔍 Technical Structure Breakdown
📐 Triangle Pattern
Formation Type: Descending Triangle
Support Level: ~$3,245
Lower Highs Resistance: Downward sloping line, showing consistent bearish pressure.
Breakdown Confirmation: Clear move below triangle support, followed by a retest and rejection, confirming bearish momentum.
🔄 Key Support & Resistance
Resistance Zone: $3,300–$3,340
This area has acted as a supply zone, where sellers continue to overpower buying attempts. The price has failed multiple times to break above this region, creating a solid resistance cap.
Support Level (Previous Base of Triangle): $3,245
Price repeatedly bounced off this level before the final breakdown, making it a significant level for validation of the pattern.
Next Key Support/Target: $3,155
The projected move is derived by measuring the height of the triangle and subtracting it from the breakout point. This target also aligns with a previous demand zone, increasing its relevance.
➰ Black Curve Line (Dynamic Resistance)
This curved resistance line adds further technical weight to the downtrend. It’s a visual cue of how momentum is progressively shifting downward. The curve reflects a deceleration in bullish effort, a warning signal often preceding breakdowns.
⚙️ Trade Plan: Bearish Bias
Component Level
Entry Zone $3,265–$3,270 (retest of breakdown)
Stop Loss $3,317 (above triangle and curve line)
Take Profit $3,155
Risk-Reward Ratio: ~2.5:1 (based on entry near $3,270, SL $3,317, TP $3,155)
Setup Type: Breakdown + Retest (high-probability pattern continuation setup)
⚠️ Risk Management & Confirmation Factors
Confirmation Needed: A clean hourly candle close below the support zone, followed by rejection wicks on retest, strengthens the case for short entries.
Invalidation: A strong bullish break above $3,317 (stop level) invalidates this setup and could signal a reversal or false breakdown.
Volatility Note: Be mindful of macroeconomic events or FOMC-related headlines that may trigger increased volatility in precious metals.
📊 Conclusion & Trader Sentiment
The descending triangle in gold is a textbook example of consolidation under pressure. With sellers continuously pushing price into lower highs while buyers cling to horizontal support, the eventual outcome often favors the dominant trend—which in this case is bearish.
The current structure offers a clean technical setup for short traders with well-defined risk levels and a logical downside target. As always, ensure strict adherence to risk management principles and stay aware of market news that could impact gold volatility.
📌 Tag Ideas:
#XAUUSD #GoldAnalysis #TrianglePattern #BreakdownSetup #TechnicalAnalysis #PriceAction #BearishTrade #MetalsTrading #ShortSetup #ForexIdeas
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.
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.