Gold Head and Shoulders Pattern🔍 Pattern Identified: Head and Shoulders (Bearish Reversal Pattern)
This is a classic Head and Shoulders pattern, which often signals a potential trend reversal from bullish to bearish.
Left Shoulder: Formed after a strong uptrend, followed by a small correction.
Head: A higher peak than the shoulders, indicating the last strong bullish push.
Right Shoulder: A lower high, indicating weakening bullish momentum.
Neckline: The support level connecting the lows between shoulders and the head. In this chart, it's slightly sloped upward.
💡 Current Price Action:
Price is hovering just around the neckline (~$3,300–3,310).
A break below the neckline with strong volume would confirm the pattern and likely trigger a move lower.
Volume has spiked during the right shoulder drop, suggesting sellers are already getting aggressive.
📉 Bearish Scenario (Most Probable if neckline breaks):
Breakdown from the neckline could lead to a drop toward the $3,160–3,180 zone initially.
Measured move target (height from head to neckline projected downward) could push price even lower, around $3,100–3,120.
📈 Bullish Rejection (Invalidation):
If price fails to break the neckline and instead rebounds, watch for resistance around the $3,360–3,400 zone (right shoulder high).
A break above the head (~$3,520) would completely invalidate this pattern and suggest a continuation of the uptrend.
🔄 Trading Strategy Suggestions:
Aggressive bears could short on a break and close below the neckline.
Conservative bears might wait for a retest of the neckline after the breakdown.
Bulls should wait for confirmation of support above the neckline or a higher high formation.
