XAUUSD remains in a bearish trend on the daily timeframe, continuing to form lower highs and lower lows. The current decline appears to be the final leg of a larger bearish cycle, with sellers maintaining control as price moves toward a significant liquidity area.
From an Elliott Wave perspective, the market appears to be developing Wave 5 following the completion of Waves 1 through 4. As this final bearish leg unfolds, price is approaching a major demand zone between 4,084 and 4,119, where Wave 5 could potentially terminate.
This area is particularly important because it represents a key liquidity objective below recent lows. Markets often seek liquidity before establishing a meaningful reversal, and a move into this zone could trigger a final sweep of sell-side liquidity. Such a move would help clear remaining downside liquidity and potentially create the conditions for buyers to step back into the market.
As price approaches the demand zone, traders should monitor for signs of seller exhaustion, including a liquidity sweep, strong rejection from the lows, or a bullish market structure shift. These developments would suggest that the market has completed its liquidity objective and that the bearish cycle may be nearing its end.
While the broader trend remains bearish for now, the 4,084–4,119 region stands out as a high-interest area where liquidity, market structure, and Elliott Wave projections converge. If buyers begin to absorb selling pressure within this zone, it could signal the completion of Wave 5 and the start of a larger corrective recovery.