Gold - Watching for Trendline Retest Gold has shown a significant breakout from a recent downtrend resistance line on the 4-hour chart. The price action suggests a shift in momentum, but a potential retest of the broken trendline offers a high-probability entry point.
Technical Analysis:
Trendline Breakout Confirmed: The provided chart clearly shows XAUUSD breaking above a descending trendline that has defined the recent short-term consolidation/downtrend. This breakout indicates a potential resumption of bullish momentum or the end of the consolidation phase.
Immediate Resistance: The price has encountered resistance near the area of the previous daily high (PDH) or a local swing high around 3,376.6. This level will be the immediate target for buyers if the breakout holds.
Potential Retest Zone: A common occurrence after a trendline breakout is a "retest" of the broken resistance level, which now acts as support. The trendline itself and the immediate support levels identified on the chart (e.g., 3,335.8 to 3,316.6) form a potential retest zone.
Trade Idea & Strategy:
The primary trade idea is to wait for a technical confirmation of the breakout by observing a retest of the broken trendline.
Entry Strategy (Bullish Confirmation):
Wait for the price to pull back towards the broken trendline (approximately 3,330 to 3,345 area, depending on the exact slope).
Look for bullish reversal signals (e.g., candlestick patterns like hammers, engulfing patterns, or significant buying volume) at the trendline support.
Enter a long position upon confirmation of support at the retest zone.
Potential Target 1: The recent swing high/PDH area around 3,376.6.
Potential Target 2: If Target 1 is cleared, the high of 3,476.0 (or previous major resistance levels).
Stop Loss: Place a stop loss below the low of the retest candle or below the significant support area (e.g., below 3,300), invalidating the bullish setup.
Alternative Scenario (Bearish Rejection):
If the price fails to hold the trendline support during the retest and decisively breaks back below it, the breakout may be considered a false breakout. In this scenario, the market could revert to the previous downtrend structure.
Disclaimer: This is an analysis for educational purposes and is not financial advice. Always perform your own research and risk analysis before trading.
