XAUUSD Setup: Overbought Conditions Signal a Potential Pullback!OANDA:XAUUSD Price is approaching a key resistance zone at the upper boundary of the ascending channel. This boundary often acts as a natural barrier where the market tends to slow down or reverse. As price reaches the channel top, the probability of a correction increases as profit-taking pressure builds.
If a correction unfolds, the 3,715 USD level will be the key support to watch. The resilience of buyers around this zone will determine whether the uptrend can extend further and push prices beyond previous highs. On the other hand, if 3,715 is broken, the market could shift direction with price sliding deeper toward the lower boundary of the channel and temporarily putting buyers at a disadvantage.
What matters most now is not rushing into trades but observing carefully. The market always leaves clues through price action, candlestick formations and trading volume. When these elements align, confirmation becomes stronger and that is the moment when a setup carries real weight. Above all, risk management remains essential because it is the shield that allows traders to withstand uncertainty and seize opportunities with confidence.
Good luck and trade safe!
