XAUUSD Short: Correction to 3920 Expected from the Highs

[Antony Bishop]

Hello, traders! The price auction for XAUUSD has been dominated by a strong bullish trend, which has been clearly defined by a large ascending channel. The market has consistently made higher highs and higher lows, breaking through key resistance levels like 3640 and showing that the buyer initiative has been in firm control of the trend.

Currently, the auction has reached a major point of contention at the 4015 supply level. The price is consolidating here, right below the upper resistance line of the ascending channel, after a failed initial attempt to break higher. This area represents a significant test for the continuation of the uptrend.

My scenario for the development of events is a 'blow-off top' followed by a correction. I believe the price will make one final push, breaking the 4015 level to touch the channel's upper resistance line. In my opinion, this move will be exhaustive, and a sharp reversal will occur from that line. The take-profit is therefore set at 3920, targeting a retest of the nearby trend line.