📊 MARKET OVERVIEW
XAU/USD remains under sustained bearish pressure as price trades deep within a corrective channel, now testing the key 78.6% Fibonacci retracement at 3360. After failing to reclaim ground above the moving averages earlier in the week, the metal has gradually lost altitude, with momentum steadily fading. Price is currently trading below both the 50-period and 200-period weighted moving averages, reflecting a clear bearish bias in the short- to medium-term trend.
Despite the prevailing downside momentum, the 14-period RSI is beginning to recover from oversold conditions, suggesting that selling pressure may be losing some intensity. However, until buyers can reclaim broken resistance zones, the technical structure remains negative, and risks of further downside persist. The focus now turns to the reaction around 3360, which will determine whether a deeper slide toward 3340 unfolds, or if short-term bulls can regain some control.
📈 TECHNICAL ANALYSIS
Key Support and Resistance Levels
Immediate support is located at the 78.6% Fibonacci level at 3360, which is now under test. A sustained break below this level would expose the next major support near the 3340.6 full retracement zone (100% Fib). These levels are critical in defining the next phase of market direction.
To the upside, initial resistance is aligned with 3380 (61.8% Fib), which coincides with prior structural resistance. Additional hurdles appear at 3395.7 (50% Fib) and 3420.5 (23.6% Fib), with the key swing high resistance located at 3451.2. Bulls would need to reclaim at least 3380 to neutralize current selling pressure.
Moving Averages and Dynamic Price Action
Price action remains firmly beneath both the 50-period and 200-period weighted moving averages, which continue to slope lower and offer dynamic resistance. The moving average cluster is now centered between 3380–3390, which represents an important ceiling for any bullish recovery attempt.
As long as price remains trapped below these averages, rallies are likely to face selling pressure and be corrective in nature. Only a decisive close back above the 200-WMA would indicate a potential shift in trend dynamics.
RSI Momentum and Bearish Pressure
The 14-period RSI has begun to recover from deeply oversold territory, now edging back toward 45 after previously dipping near 30. This modest RSI recovery suggests a slowing in bearish momentum, but has yet to deliver a clear bullish divergence or breakout.
If RSI can climb above 50 in the coming sessions, it could signal improved short-term sentiment and provide the foundation for a broader recovery. Conversely, failure to clear 50 would likely confirm that sellers remain in control.
Candlestick Behavior and Price Action Clarity
Recent candlesticks continue to display shallow bullish attempts with limited follow-through. While some lower wicks suggest buyers are probing for support near 3360, the absence of strong bullish reversal patterns or impulsive candles reinforces the prevailing downside bias.
Traders should watch closely for the emergence of bullish engulfing or hammer formations around 3360 to gauge whether a base is developing. Without such signals, the risk of continued decline remains high.
Chart Structure and Breakdown Formation
Structurally, XAU/USD remains locked within a well-defined descending channel, having posted a clear sequence of lower highs and lower lows over the past several sessions. The failure to defend prior support zones and the inability to reclaim moving average resistance has strengthened the bearish setup.
The current test of 3360 represents a critical juncture — a break lower would likely see the channel extend toward the 3340 zone. Conversely, a defended bounce with bullish momentum could trigger a retest of dynamic resistance above.
Fibonacci Retracement and Extension Levels
The Fibonacci retracement from 3451.2 (recent high) to 3340.6 (recent low) outlines the key technical roadmap. With 3360 (78.6%) now under active pressure, the final major Fibonacci defense is near 3340, below which a full breakdown would be confirmed.
Initial upside targets in the event of a bounce include 3380 (61.8%) and 3395.7 (50%). The broader technical structure remains bearish unless price can reclaim 3395–3420, reestablishing bullish momentum.
🔍 MARKET OUTLOOK & TRADING SCENARIOS
Bullish Scenario
A defended bounce from 3360, accompanied by RSI climbing above 50 and price reclaiming 3380, could trigger a recovery toward 3395.7 and potentially 3420.5. This would require improving momentum and clear bullish price action confirmation.
Neutral Scenario
A sideways range may emerge between 3360–3380 if bulls defend current support but lack sufficient strength for an impulsive rebound. RSI stabilizing between 45–50 would reflect this neutral stance, with range-bound conditions likely.
Bearish Scenario
A decisive break below 3360, combined with RSI rolling back below 40, would open the path for a renewed decline toward 3340.6. This move would confirm sustained bearish pressure and extend the existing downtrend.
💼 TRADING CONSIDERATIONS
Bullish setup: Watch for bullish reversal signals at 3360 with RSI support. Targets: 3380, 3395.7. Stops below 3340.
Bearish setup: Short entries favored on breakdown below 3360 or rejection of 3380. Targets: 3340.6. Stops above 3380.
Risk context: RSI recovery warrants caution, but prevailing trend and moving average alignment still favor the bears unless strong reversal patterns emerge.
🏁 CONCLUSION
XAU/USD remains under clear bearish control as price pressures the 78.6% Fibonacci support at 3360. Although RSI is attempting recovery, sellers continue to dominate below key moving averages. Unless buyers can generate a forceful reversal above 3380–3395, the risk of further downside toward 3340 remains elevated. Traders should monitor price behavior at current levels closely to assess whether a base is forming or if the broader downtrend will persist.
⚠️ DISCLAIMER
This analysis is for informational purposes only and does not constitute financial advice. Always consult with a licensed financial professional before making trading decisions.
