Gold continues to trade with a clear bearish structure respecting the descending channel and remaining below the major bearish trendline. The recent pullback into 4060-70 zone was rejected indicating that sellers are defending this resistance area and maintaining downside momentum. Price is also trading below the previous swing highs and key horizontal resistance around 4030-4100 reinforcing the bearish outlook.
The daily support near 3940 is currently being tested making it a critical level to watch. A decisive H4 close below this support would confirm fresh selling pressure and increase the probability of a move toward 3900 followed by the extension targets near 3842 and 3781. While a short term corrective bounce cannot be ruled out from current levels, any recovery toward the highlighted sell zone is likely to attract sellers unless bulls manage to secure a strong H4 close above 4100.
Until that happens the overall market structure remains bearish and rallies are still favored as selling opportunities rather than signs of a trend reversal.
Trade Plan – Sell Setup
Sell Zone: 4030-4070
Targets: 3940, 3900, 3842, 3781
Invalidation: H4 close above 4100
Note
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