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XAUUSD Analysis: Elliott Wave Structure Confirms Downside Momentum – Target 4351
Gold prices have weakened significantly in the short term as selling pressure returns, pushing prices below the 4630 area. From a technical perspective, this no longer looks like a minor correction. It begins to resemble a continuation structure and nearby support areas begin to lose influence.
Gold prices have weakened significantly in the short term as selling pressure returns, pushing prices below the 4630 area. From a technical perspective, this no longer looks like a minor correction. It begins to resemble a continuation structure and nearby support areas begin to lose influence.
Technical structure
Chartically, the price fell below the recent reaction zone and is currently testing the 4640 sell zone from a weaker position. Notably, the market failed to generate a strong enough rebound from this area, and each recovery attempt remained shallow and sold off quickly.
The current structure is important for three reasons:
– Price breaks out of the resistance area at 4640.
– Lows near 4557 become the next important bearish reference.
-The broader structure still leaves room for deeper development into 4351.
Critical levels to monitor:
4640: Previous support area, now the level where price needs to recover.
4557: Recent strong support (starting point of wave 3).
4351: Provides deeper support if downside momentum extends (key liquidity objective).
Elliott wave concept
From an Elliott Wave perspective, gold appears to be starting to show signs of entering a new down cycle, with the current decline looking more impulsive than the recent rally. After completing its previous short-term recovery, the market now appears to be forming the first stages of a new bearish structure.
Specifically, wave collapse indicates:
– Waves (1) and (2) completed in the 4640 area, forming a lower advance.
– The market is now developing a wave (3) – the strongest part of the impulse move – targeting the lower extension.
This is important because once price leaves the retracement zone and begins to break support, the market is no longer judged to be on a recovery chart. The confirmation phase of the next down cycle begins.
Fibonacci Structures and Liquidity
Structurally, 4557 is now the closest liquidity area to which price can be attracted if selling pressure persists. If this level fails to hold, 4351 becomes the deeper technical target in a bearish scenario today and beyond.
When nearby support is broken and the larger wave structure turns downward, the market will typically begin to move toward lower liquidity pools at the bottom of the descending channel.
So what is important?
If gold prices remain below 4640 and fail to close above there again, the intraday bearish scenario remains active. In this case, the market may continue to put pressure on 4557 first.
If 4557 is broken and momentum is evident, the bearish structure will expand further, with the next bearish reference point being 4351.
On the other hand, if the price quickly recovers to 4640 and holds above it, then the immediate downward pressure will ease and the chart may warrant a more neutral re-evaluation.
in conclusion
Gold is weakening in the short term, with the current structure clearly tilting towards a bearish scenario. The loss of the 4640 area indicates that buyers are losing control while sellers are starting to regain momentum within the descending channel.
Unless the price is able to reclaim the broken support area, the market is likely to continue falling towards 4557, possibly towards 4351 if bearish pressure builds.
The bearish moves are already at play, and structurally the market still shows room for further weakness.
Warning: This analysis is for educational purposes only and does not constitute financial advice.