Gold Spot (XAU/USD) Short Setup with Key Target and Stop Loss
Analysis:
Market Context:
The chart illustrates a bearish trend structure, with the price forming lower highs and lower lows. The price is currently retracing into a key resistance zone, marked by the yellow highlighted area.
Entry Zone:
The current price action is approaching the 2,778 - 2,780 resistance zone, which aligns with a potential reversal area based on historical price reaction.
Target:
The bearish move targets the support zone at 2,745.36, as highlighted on the chart. This level is reinforced by previous demand and aligns with the expected continuation of the downtrend.
Stop Loss:
A stop loss is placed slightly above the resistance zone, around 2,780.05, to provide a buffer against potential false breakouts.
Reasoning:
Price rejected the resistance zone previously, confirming strong seller interest.
The bearish trend structure supports continuation to lower levels.
RSI (if used) or other momentum indicators likely suggest overbought conditions at the resistance zone.
Trade Details:
Entry Level: Between 2,778 - 2,780
Target Level: 2,745.36
Stop Loss: 2,780.05
Risk-Reward Ratio: Approximately 3:1
Conclusion:
This idea capitalizes on the bearish trend and rejection at a key resistance zone. Monitor the price closely for bearish confirmation, such as rejection candles or volume spikes, before entering the trade.