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The XAUUSD/H1 market is witnessing a strong downtrend after breaking out of a sideways trading range and forming sustained lower highs and lows. The 34-hour exponential moving average (EMA34) on the H4, H2 and H1 timeframes is below the 89-hour exponential moving average (EMA89), indicating that selling pressure remains under control and there are no signs of an end to the downtrend.
– After this sharp decline, prices are currently going through a short-term sideways phase, but the rebound remains relatively weak, suggesting that buyers are primarily reacting technically rather than forming a clear reversal pattern.
– This area (4509 – 4515) is currently a key resistance level and is the intersection of the downtrend line, the 34-hour exponential moving average (EMA34) on the first half time frame and the previous breakout area. If the price fails to break out of this area and continues to trade below these factors, the downtrend will continue to expand.
✅ Discount:
1. Sales scenario:
– Prioritize selling opportunities when price retests the resistance area (4480 – 4483) and above (4509 – 4515), but rebounds and closes below the resistance area.
– The price is still following the downtrend line and the candle closed below the 34-day exponential moving average (EMA34).
==> These are areas that have been broken out before, so the likelihood of a selling reaction is relatively high.
==> At the same time, these resistance areas are converging with the 34-day exponential moving average (EMA34) – the downtrend line of the time frame (30 minutes – 1 hour).
==> If the strong downtrend continues and the price completely breaks out of the support areas (4405 – 4414), the downtrend may extend to the lower target areas (438 and 435).
2. Purchase scenario:
– If the price breaks out of the resistance area (4509 – 4515) and closes above it.
– If the price breaks the downtrend line and closes above the 34 EMA (on the 1 hour time frame).
=> Then the current downtrend structure will weaken, opening the way for a short-term recovery into the zone (453 – 454).
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