XAUUSD Bearish Pennant Breakdown | Retest in Play – 3090 TargetGold (XAUUSD) has been in a corrective phase after reaching the resistance zone around 3370–3420 USD, where the price was previously rejected with strong selling pressure. Over the past sessions, price action has developed into a Bearish Pennant pattern, typically seen as a continuation pattern in a downtrend.
Following a sharp drop from the highs, the price consolidated between converging trendlines, creating lower highs and higher lows. This structure resembles a pennant or triangle formation, which traders often interpret as a pause before the next leg down.
🔍 Key Technical Features:
1. Resistance Zone (3370–3420 USD):
Strong institutional selling observed here.
Multiple rejections confirm this zone as a significant supply area.
This area also serves as a risk management reference point for stop-loss placement.
2. Support Zone (3210–3230 USD):
The price bounced multiple times from this level, making it a key demand area.
A clean break below this zone would confirm bearish continuation.
3. Trendline Resistance:
A descending trendline has been respected consistently since May 8.
Price recently retested this trendline after a minor pullback, aligning with the bearish pennant structure.
4. Bearish Pennant Pattern:
Forms after a strong downward impulse.
The consolidation is narrowing within converging trendlines.
A breakdown with high volume typically leads to a continuation of the prior trend.
5. Breakout & Retest:
Price has already broken below the pennant's lower boundary.
The current move is a retest of the broken trendline—a classic setup for entering a short position upon rejection.
🎯 Bearish Target Projection:
The measured move from the pole of the pennant suggests a target around 3090 USD.
This level is derived by taking the height of the initial drop before the pennant and projecting it downward from the breakout point.
🛑 Stop Loss Strategy:
A conservative stop loss can be placed just above the 3370 USD resistance zone.
Alternatively, a tighter stop could be placed slightly above the trendline (~3240–3250) for aggressive entries, though this increases the risk of a false breakout.
✅ Trading Plan Summary:
Aspect Level / Detail
Entry Zone After retest & rejection (near 3230–3240 USD)
Target 3090 USD
Stop Loss Above 3370 USD
Risk-Reward Approx. 1:3 or higher
Pattern Type Bearish Pennant
🧠 Final Thoughts:
This is a textbook bearish continuation setup with strong confluences:
Trendline resistance
Bearish pennant formation
Breakdown with retest
Clear resistance and support zones for managing risk
If momentum sustains to the downside after the retest, we could see a swift drop toward 3090 USD, offering a favorable shorting opportunity for swing and intraday traders alike.
Always confirm with volume and candlestick confirmation before execution. Stay updated with fundamental drivers such as CPI, PPI, or FOMC comments, which can inject volatility.
