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XAUUSD Early Week: Gold Trapped Between USD Strength and Key Liquidity Areas

Gold traded in a highly sensitive environment at the start of the week as strength in the U.S. dollar continued to outweigh some support generated by safe-haven demand. While geopolitical tensions in the Middle East continue to provide necessary demand for gold, the market is currently reacting more strongly to inflationary themes and a stronger U.S. dollar, which is preventing gold prices from regaining full upward momentum.

What’s most striking right now is that gold is no longer operating in a clean single trend. Instead, prices are pulled towards key liquidity areas, where larger market participants are more likely to leave a clear reaction before confirming the next directional move.

H4 technical architecture

From the H4 time frame, gold is still in the technical recovery stage after the early decline, but the current rebound is not strong enough to confirm a bullish reversal. Price continues to react below the nearby supply zone, suggesting buyers are only holding a short-term attitude toward a return higher rather than regaining full control of the structure.

The 5115-5120 area is currently the most important short-term monitoring area. This is an FVG selling area and if prices continue higher, selling pressure may re-emerge. If the market fails to break out of this area with significant momentum, the current rally will likely remain corrective in nature.

Beyond that, 5206 is a more important confirmation standard. If the price is able to reclaim this area and hold above it, the recovery could extend further towards 5261, where there is stronger liquidity and resistance within the current structure.

On the downside, 5001 is the closest liquidity support. This is a key level that buyers need to defend to keep the short-term rally intact. If the price loses this level, the current structure will weaken further and could pull the market towards the 4870 – 4880 area, which is the main order block/buy area on the H4 chart.

What does order flow indicate?

Currently, gold continues to fluctuate between two opposing forces:

A stronger U.S. dollar will continue to put pressure on gold prices in the short term

Geopolitical risks prevent gold prices from falling easily

Technically, this is reflected in the fact that the price is currently oscillating between support below and supply above, rather than producing an outright breakout. In other words, the market is in a phase of testing liquidity, and the reaction around current levels may determine the clearest trends in the first few trading days of the week.

Trading scenario
Purchase scenario

Entry: If price holds support and shows a clear bullish reaction, around 5001
SL: Minimum 4870
TP1: 5115 – 5120
TP2:5206
TP3:5261

sales scenario

Entry: Around 5115 – 5120 if price pulls back into this area but fails to break supply
SL: 5206 or above
TP1:5001
TP2: 4870 – 4880

Alternative Bearish Continuation

Entry: When there is a clear break below 5001 points and confirmation of support failure
SL: 5115 or above
TP1: 4870 – 4880
TP2: If downward pressure continues to expand, liquidity levels will deepen further

in conclusion

Overall, gold starts the week in a big decision-making area. The current rally is still not enough to confirm a bullish reversal, and the support area below remains the market’s target. Therefore, the main focus now should not be on predicting trends prematurely, but rather on how the price reacts around 5001, 5115-5120 and 5206.

If price continues to trade below supply, a corrective bearish scenario will remain the most relevant. On the other hand, if buyers are able to reclaim the overhead resistance area, gold prices may be more certain to extend its short-term recovery.

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