XAUUSD (Gold) - Major Breakdown Expected, Targeting 2600
Updated
Gold (XAU/USD) is currently showing signs of exhaustion after a prolonged bullish rally that has taken the price above $2,700. Based on technical indicators and key levels, we are approaching a critical juncture where a major breakdown could be imminent.
Key Levels and Targets:
Bounce back test: $2,474
This level represents a possible short-term rebound zone before the downtrend resumes. It aligns with previous minor support, acting as a key resistance for now.
Critical Break-Down Level: $2,720
The price has been hovering around $2,720, which is a crucial support level. A daily or weekly close below this level would likely confirm a stronger downward move.
Ultimate Target: $2,600
Once the break of $2,720 is confirmed, the next major target stands at $2,600. This level represents a deeper retracement in line with the completion of a larger cycle of profit-taking in the broader market.
Technical Indicators:
RSI Divergence: The Relative Strength Index (RSI) shows bearish divergence, signaling a potential reversal from overbought conditions.
Bearish Flag Pattern: There is a bearish flag forming, which typically precedes a strong breakdown. The current price action fits within this pattern, further supporting a potential downside move.
Scenario Planning:
Bearish Scenario: A confirmed break below $2,720 is expected to trigger a quick move down to $2,600. At this point, it would confirm a reversal in the current rally, potentially signaling the end of the ongoing bull trend.
Bullish Scenario (Less Likely): If prices manage to hold above $2,720 and break above the resistance at $2,748, the bull trend could resume, possibly testing the previous highs.
Key Levels and Targets:
Bounce back test: $2,474
This level represents a possible short-term rebound zone before the downtrend resumes. It aligns with previous minor support, acting as a key resistance for now.
Critical Break-Down Level: $2,720
The price has been hovering around $2,720, which is a crucial support level. A daily or weekly close below this level would likely confirm a stronger downward move.
Ultimate Target: $2,600
Once the break of $2,720 is confirmed, the next major target stands at $2,600. This level represents a deeper retracement in line with the completion of a larger cycle of profit-taking in the broader market.
Technical Indicators:
RSI Divergence: The Relative Strength Index (RSI) shows bearish divergence, signaling a potential reversal from overbought conditions.
Bearish Flag Pattern: There is a bearish flag forming, which typically precedes a strong breakdown. The current price action fits within this pattern, further supporting a potential downside move.
Scenario Planning:
Bearish Scenario: A confirmed break below $2,720 is expected to trigger a quick move down to $2,600. At this point, it would confirm a reversal in the current rally, potentially signaling the end of the ongoing bull trend.
Bullish Scenario (Less Likely): If prices manage to hold above $2,720 and break above the resistance at $2,748, the bull trend could resume, possibly testing the previous highs.
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Our target done at 2600
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