XAUUSD Divergence Signals Potential Upside Reversal
As this trading week opens, XAUUSD 
XAUUSD presents a clear example of one of the Smart Money Techniques (SMT): Divergence.
By observing the recent price action, we can identify an interesting shift in the market structure.
After the Non-Farm Payroll (NFP) report, XAUUSD surged to the 2670 level before reversing sharply. Normally, after forming a lower high like this, price action should create a new lower low, continuing the bearish trend.
However, instead of following through, the descent paused around 2632, creating a new low but without the expected momentum to break further downwards.
This divergence from the expected bearish structure (a typical zigzag formation) suggests that sellers may be losing control, and the market could be entering an accumulation phase. The failure to make a significant lower low hints at potential buyer interest emerging at the current levels.
Key Levels to Watch:
1. 2632 Support Level: This level marks the recent lower low where divergence was spotted. If the price holds above this level, it strengthens the case for accumulation.
2. 2670 Resistance Level: The most recent lower high. A break above this could confirm the upside reversal and signal the start of a new bullish trend.
3. 2700-2710 Region: This zone could act as the next significant resistance if the price pushes higher, representing a key psychological barrier.
Given the divergence and the possible accumulation phase, this setup supports the idea of an upcoming bullish reversal. Traders should closely monitor price behavior at these key levels to confirm the direction of the next significant move.
XAUUSD presents a clear example of one of the Smart Money Techniques (SMT): Divergence. By observing the recent price action, we can identify an interesting shift in the market structure.
After the Non-Farm Payroll (NFP) report, XAUUSD surged to the 2670 level before reversing sharply. Normally, after forming a lower high like this, price action should create a new lower low, continuing the bearish trend.
However, instead of following through, the descent paused around 2632, creating a new low but without the expected momentum to break further downwards.
This divergence from the expected bearish structure (a typical zigzag formation) suggests that sellers may be losing control, and the market could be entering an accumulation phase. The failure to make a significant lower low hints at potential buyer interest emerging at the current levels.
Key Levels to Watch:
1. 2632 Support Level: This level marks the recent lower low where divergence was spotted. If the price holds above this level, it strengthens the case for accumulation.
2. 2670 Resistance Level: The most recent lower high. A break above this could confirm the upside reversal and signal the start of a new bullish trend.
3. 2700-2710 Region: This zone could act as the next significant resistance if the price pushes higher, representing a key psychological barrier.
Given the divergence and the possible accumulation phase, this setup supports the idea of an upcoming bullish reversal. Traders should closely monitor price behavior at these key levels to confirm the direction of the next significant move.
Trade active
Initiated a long position after an equal low was formed at the daily low of 2644
Trade active
I am now looking for a cross over my initial position as the strong selling pressure is grabbing liquidity Trade active
I understand that it's a counterintuitive trade, which makes it a bit difficult to grasp.
Price action is now over 2654.6 after seeking liquidity down to 2640 earlier today, which is why I mentioned it.
Trade active
Price action needs to cross over 2656 price area in a stop hunt strategy that can create more upside moves. 
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