Gold is in a downtrendā¦ but is the opportunity for a rebound growing?
Market Context
On the D1 timeframe, the downtrend structure is still very clear:
Series of Lower Highs ā Lower Lows
CHoCH has appeared confirming the weakening of the previous uptrend
Price is moving below the H4/D1 downtrend line
There is no doubt, the main trend currently is still bearish.
Argument for the rebound scenario
However, it is necessary to look at the current position of the price:
It has reached the important D1 support area (4370 ā 4400)
It has undergone a strong, almost one-way decline
Liquidity above is still quite āthickā
In this context, the market tends to:
ā Technical rebound to rebalance
ā Attract liquidity before continuing the trend
In other words:
A strong decline does not mean it will continue to drop immediately.
Potential rebound scenario
If the 4370 ā 4400 area holds:
Price may form a rebound to the areas:
4650 ā first reaction area
4850 ā intermediate area
5000 ā 5025 ā supply area + important trendline
This is a reasonable area for the market to seek liquidity above.
Confirmation conditions
The rebound scenario will be clearer if:
Price does not break deeply below the current bottom
Signs of accumulation / slowing down the decline appear
H1 ā H4 timeframe begins to have a slight structure shift
Risks to note
If the price breaks strongly below 4370:
ā The rebound scenario will be invalidated
ā The market may continue to expand the downtrend
Conclusion
The main trend is still down.
But at the current position, the probability for a technical rebound is increasing.
Daisy Capital
Follow the trend, but don’t overlook logical rebounds.