Hello Everyone,
It seems
XAUUSD
found one of the first strong resistance levels after initiated the price discovery phase and the price has been continuously dropping for 3 days. On LTF, the price broke several support levels and also began to make lower highs and lower lows. On HTF, the price ripped through one of the nearest support levels and closed below the support area. Although on HTF, there is no close below HL yet, it's too early to say this bull trend is over. Since the price has been skyrocketed for months, this drop/move might be a retracement and might give an opportunity for those who seek optimal entry levels. In order to identify what might happen, i came up with several scenarios:
1) The price finds support at given/drawn Fibonacci levels and makes a retracement to the blue square zone. If the price manages to break through this level, it will possibly retest the red square zone(which is also not retested) and will decide whether if it's going to make new higher highs or will revisit the blue zone. It's too early to talk about what might happen next, as this scenario has not occurred yet.
2) The price finds support at Fibonacci levels, retraces to the blue zone, gets rejected, and continues to drop to the orange support level, which is important since this level is the initiation point of the latest impulsive move. If the price finds support here, high likely will give a visit to the blue area. If the price breaks out and finds support at the said level, check out the first scenario.
3) The price continues to drop, breaks through the orange area as well, and visits 1744-1671 levels.
It seems
XAUUSD
found one of the first strong resistance levels after initiated the price discovery phase and the price has been continuously dropping for 3 days. On LTF, the price broke several support levels and also began to make lower highs and lower lows. On HTF, the price ripped through one of the nearest support levels and closed below the support area. Although on HTF, there is no close below HL yet, it's too early to say this bull trend is over. Since the price has been skyrocketed for months, this drop/move might be a retracement and might give an opportunity for those who seek optimal entry levels. In order to identify what might happen, i came up with several scenarios: 1) The price finds support at given/drawn Fibonacci levels and makes a retracement to the blue square zone. If the price manages to break through this level, it will possibly retest the red square zone(which is also not retested) and will decide whether if it's going to make new higher highs or will revisit the blue zone. It's too early to talk about what might happen next, as this scenario has not occurred yet.
2) The price finds support at Fibonacci levels, retraces to the blue zone, gets rejected, and continues to drop to the orange support level, which is important since this level is the initiation point of the latest impulsive move. If the price finds support here, high likely will give a visit to the blue area. If the price breaks out and finds support at the said level, check out the first scenario.
3) The price continues to drop, breaks through the orange area as well, and visits 1744-1671 levels.