Gold – Potential Bearish Continuation After Lower High Formation
Market Context:
Gold has shown strong bullish momentum in recent sessions, but the current price structure hints at potential exhaustion. After forming a possible lower high near the $3,220 zone, price action has started to roll over, and the market may now be transitioning into a distribution phase.
Technical Breakdown:
- The chart shows a clear uptrend leading into the $3,220 region, followed by a rejection and initial breakdown.
- A lower low has already been printed, signaling a potential change in character (CHOCH) from bullish to bearish.
- A Fair Value Gap (FVG) has been left behind on the move down, sitting between approximately $3,160–$3,180. This area could act as a supply zone if price attempts a retracement.
Bearish Scenario Development:
Price is expected to retrace back into the FVG (imbalance), where selling pressure may reappear. This area also aligns roughly with a 0.28 Fibonacci level from the recent impulse down — a common retracement point for corrective moves in a shifting market.
Should this retracement hold and show rejection (e.g., wick rejections, bearish engulfing, displacement), the market could resume downward movement, continuing the developing bearish trend. The next potential liquidity target sits around the $3,060–$3,040 zone, aligning with the 0.618–0.65 Fibonacci retracement of the prior bullish move.
Key Technical Levels:
- Supply/FVG zone: ~$3,160–$3,180
- Current resistance region: ~$3,220 (prior swing high)
- Potential demand zone: ~$3,060–$3,040 (0.618–0.65 retracement)
- Deeper retracement zone: ~$3,000 (0.786 level and prior structure confluence)
What to Look For:
- If price retraces into the FVG and shows weakness, this could confirm the lower high and continuation of the bearish leg.
- A clean break of the $3,060 level would further validate the bearish bias, likely drawing price toward deeper retracement zones.
- If, however, price reclaims and holds above the FVG zone, the bias may shift back to bullish, and a reevaluation would be necessary.
Conclusion:
Gold is currently setting up a possible bearish continuation following a lower low and signs of exhaustion. The upcoming reaction to the FVG zone will be crucial. If the market respects this supply region, it could offer a clean move toward the $3,060 area and possibly lower. As always, let price confirm before acting—structure and reaction at key zones remain vital in this unfolding setup.
Gold has shown strong bullish momentum in recent sessions, but the current price structure hints at potential exhaustion. After forming a possible lower high near the $3,220 zone, price action has started to roll over, and the market may now be transitioning into a distribution phase.
Technical Breakdown:
- The chart shows a clear uptrend leading into the $3,220 region, followed by a rejection and initial breakdown.
- A lower low has already been printed, signaling a potential change in character (CHOCH) from bullish to bearish.
- A Fair Value Gap (FVG) has been left behind on the move down, sitting between approximately $3,160–$3,180. This area could act as a supply zone if price attempts a retracement.
Bearish Scenario Development:
Price is expected to retrace back into the FVG (imbalance), where selling pressure may reappear. This area also aligns roughly with a 0.28 Fibonacci level from the recent impulse down — a common retracement point for corrective moves in a shifting market.
Should this retracement hold and show rejection (e.g., wick rejections, bearish engulfing, displacement), the market could resume downward movement, continuing the developing bearish trend. The next potential liquidity target sits around the $3,060–$3,040 zone, aligning with the 0.618–0.65 Fibonacci retracement of the prior bullish move.
Key Technical Levels:
- Supply/FVG zone: ~$3,160–$3,180
- Current resistance region: ~$3,220 (prior swing high)
- Potential demand zone: ~$3,060–$3,040 (0.618–0.65 retracement)
- Deeper retracement zone: ~$3,000 (0.786 level and prior structure confluence)
What to Look For:
- If price retraces into the FVG and shows weakness, this could confirm the lower high and continuation of the bearish leg.
- A clean break of the $3,060 level would further validate the bearish bias, likely drawing price toward deeper retracement zones.
- If, however, price reclaims and holds above the FVG zone, the bias may shift back to bullish, and a reevaluation would be necessary.
Conclusion:
Gold is currently setting up a possible bearish continuation following a lower low and signs of exhaustion. The upcoming reaction to the FVG zone will be crucial. If the market respects this supply region, it could offer a clean move toward the $3,060 area and possibly lower. As always, let price confirm before acting—structure and reaction at key zones remain vital in this unfolding setup.
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MY LINKS
📈 Free Signals
bit.ly/3YxiRXr
💬 Discord Community
bit.ly/4jHHA3O
💵 Favorite Exchange
bit.ly/4lBeTXt
📈 Free Signals
bit.ly/3YxiRXr
💬 Discord Community
bit.ly/4jHHA3O
💵 Favorite Exchange
bit.ly/4lBeTXt
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.