XAUUSD

Hello Traders! 👋

What are your thoughts on Gold?

Gold reached the $4,700 area but failed to break above this resistance and was subsequently rejected. The price is currently forming an ascending channel, while the overall market structure remains bullish.

On the downside, the lower boundary of the ascending channel overlaps with the key support area around $4,200, as well as the Fibonacci levels marked on the chart. This confluence increases the importance of this zone as a key support and demand area.

Based on the current structure, we expect the corrective and range-bound price action to continue in the short term, with price potentially moving toward the highlighted support zone.

As price reaches this area, we expect buyers to enter the market and price to prepare for the next bullish leg.

If this scenario plays out, gold could react higher from the support zone and begin a new upward move toward the upper boundary of the ascending channel.

Meanwhile, the US CPI data due tomorrow could act as an important catalyst for gold and is likely to increase volatility around the release. A significant deviation from market expectations could trigger a sharp move in either direction and potentially cause temporary or false breakouts around key technical levels.

Therefore, the reaction around the $4,200 support and the lower boundary of the channel will be particularly important. As long as this area holds, the bullish structure remains intact. However, a decisive break below the channel and the key support zone could weaken the bullish scenario and increase the probability of a deeper correction.

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