XAUUSD: Breakdown & Retest Signals Bearish Continuation

[mendez]

Hello everyone, here is my breakdown of the current XAUUSD setup.

Market Analysis

XAUUSD previously traded within a well-defined consolidation range, where price moved sideways for an extended period, indicating balance between buyers and sellers and gradual liquidity accumulation. This range eventually resolved to the upside, triggering a clean bullish breakout and a strong impulsive rally. Following the breakout, gold expanded higher aggressively, confirming bullish intent and attracting momentum buyers. However, after reaching the upper highs near the peak of the move, bullish momentum began to fade, and price formed a clear swing top.

Currently, XAUUSD is trading below a key Resistance Zone around 4,950, which previously acted as support but has now flipped into resistance. Several breakouts above this zone failed, suggesting lack of acceptance and strong seller presence. At the same time, price recently broke below the descending triangle support and is attempting a weak pullback toward the broken structure — a classic bearish retest scenario.

My Scenario & Strategy

My primary scenario favors a short continuation, as long as price remains below the descending triangle resistance line and below the 4,950 Resistance Zone. The recent breakout attempts above resistance appear corrective and liquidity-driven rather than signs of a trend reversal. As long as these levels cap price, rallies are viewed as selling opportunities rather than bullish continuation signals. From a structural perspective, the market is transitioning from a bullish expansion phase into a broader corrective or distribution phase. The loss of higher highs and repeated rejections from resistance support the bearish case. The first downside objective lies near the 4,790 Support Zone, which represents a key demand area and a prior breakout level. This zone is expected to act as the first major target where buyers may attempt a reaction. If price reaches the support zone and shows strong rejection or consolidation, a temporary bounce is possible.

However, a clean breakdown and acceptance below 4,790 would confirm bearish continuation and open the door for a deeper move toward lower demand areas. The short bias remains valid as long as price stays below resistance and the descending structure remains intact. Any strong breakout and acceptance above the triangle resistance and the 4,950 zone would invalidate the short scenario and shift focus back to bullish continuation. Until then, structure favors sellers.

That’s the setup I’m tracking. Thank you for your attention, and always manage your risk.

[AIcash]

even if it bounces here, the bigger picture still feels distribution-heavy rather than trend continuation