4 days ago

XAUUSD Price Compression: Ready to Roar or Retreat?

The 15-Min chart of XAUUSD is showcasing a classic symmetrical triangle pattern, characterized by converging trendlines—a series of lower highs forming the descending resistance (red zone) and higher lows creating the ascending support (green zone).

This price compression is typically seen before a major breakout, as the market consolidates and traders await a decisive move

Key Highlights:
🔻 Resistance Zone (Red):

Price repeatedly rejects the downward-sloping resistance line.
Each lower high is marked with red arrows, confirming seller dominance at those levels.
Also aligned near the 200 EMA (red line), which adds dynamic resistance.

🟢 Support Zone (Green):

Buyers have consistently stepped in at rising lows, forming a steady uptrend base.
This support is acting as a launchpad, compressing the price within the triangle.
Positioned near the 50 EMA (blue line), reinforcing this support region.

📈 EMAs (Trend Context):

50 EMA below 200 EMA indicates the broader trend remains bearish.
However, price consolidating near both EMAs suggests a potential trend shift if resistance breaks.

Breakout Scenarios to Watch:
✅ Bullish Breakout Potential:

A confirmed candle close above the resistance zone with volume may ignite a rally.
Immediate upside target levels: $3,360, $3,390, and potentially $3,420+.
Would indicate short-term trend reversal and fresh bullish momentum.

❌ Bearish Breakdown Risk:

A break below the ascending support line could trigger aggressive sell-offs.
Downside target levels: $3,290, $3,260, and deeper toward $3,210.
Would validate continuation of the prior downtrend.

📊 Trading Strategy Suggestions:

Breakout traders may wait for a confirmed candle close outside the triangle (with volume).
Range traders can look for bounce trades near support and rejections at resistance until breakout occurs.
Use tight stop-losses due to narrowing range and likely sharp post-breakout volatility.
Consider risk-reward ratio minimum 1:2 when targeting breakouts.

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Disclosure:
I am a participant in TradeNation's Influencer Program and receive a monthly compensation for utilising their TradingView charts in my market analysis.
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