Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Recovery wave C may provide new selling opportunities in mid-term downtrends
Hi everyone, this is my opinion on the current XAUUSD setup.
market analysis
Gold is still trading within a medium-term descending channel, which means that despite the recent recovery from lower territory, the overall structure remains bearish. Chartwide, prices have completed a strong decline and are now entering what appears to be a Wave C corrective recovery.
This recovery has not yet changed the main trend. Alternatively, this could simply be a path to recovery with liquidity and resistance restored before sellers step in again. The most important detail here is that price is still moving below the downtrend line, while the market continues to follow the broader downtrend channel.
The current upward move is approaching the main reaction area around the 4500-4620 level, where the chart identifies the buy resistance area and sell FVG area completing the C wave. This creates an important area of convergence. If price continues to rise into this liquidity pocket, it may provide a cleaner position for sellers to enter based on the primary trend’s return.
Below the market, the 4300 area remains an important liquidity area and if bearish pressure returns strongly, deeper weakness could expose the 4134 area later.
Key price areas to monitor
C wave selling zone/resistance level: 4500-4620
Current price range: around 4579
The main selling area above: around 4845
Minimum liquidity support: around 4300
Downside target: around 4134
My scenarios and strategies
My preferred scenario is to view the current recovery as a wave C corrective move rather than a confirmed bullish reversal signal. As long as gold prices remain below the downtrend line and within a medium-term bearish structure, I still favor a strong sell-off rather than chasing a recovery.
If price moves further into the 4500-4620 liquidity resistance area and starts to show rejection, this area could become an ideal place to look for a follow-on sell setup consistent with the broader downtrend. Thereafter, gold prices may fall back to 4300 first, and if the selling momentum increases, the decline may extend to 4134.
However, if the price clearly breaks out of the resistance zone and begins to hold, the current view of a continued decline will weaken and the market may enter a broader recovery phase.
This is the setup I’m monitoring right now. Thank you for reading this article and always manage your risks carefully.
