The chart reflects a market transitioning from a corrective bearish phase into a potential short-term bullish recovery. After forming a series of lower highs and lower lows in gold chart, price found support in the lower range and initiated a strong impulsive move upward. This rally suggests that buyers have stepped back into the market with momentum, likely targeting nearby liquidity resting above recent highs.
Currently, price is approaching a well-defined supply zone, which previously acted as a consolidation and distribution area. This zone is critical, as it represents a decision point where sellers may re-enter the market. A rejection from this area could lead to a short-term pullback, potentially forming a higher low before continuation. However, a clean breakout and acceptance above this zone would indicate strength, opening the path toward higher resistance levels and shifting short-term structure more decisively bullish.
The projected path on the chart aligns with a classic liquidity grab scenario: a minor rejection to sweep weaker buyers, followed by continuation toward higher targets. This type of behavior often traps early entrants and provides better positioning for larger players. Overall, the market is at a key inflection point, and reaction to the highlighted supply zone will likely determine the next directional move.
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