On the 4H timeframe, XAUUSD is showing a bullish corrective phase after a strong bearish displacement. Price has reacted from a discount area and is now gradually pushing upward, forming short-term higher highs and higher lows ā a sign of internal bullish structure.
Currently, price is trading near the equilibrium (0.5 level), with a clear draw on liquidity toward the premium zone, where a large Fair Value Gap (FVG) remains unmitigated. This upper imbalance represents a high-probability target, as price often seeks to rebalance inefficiencies created during impulsive moves.
From an ICT perspective, the market narrative suggests that price will likely continue higher to fill the upper FVG and sweep Buy-Side Liquidity (BSL) resting above recent highs. This move into premium would complete the retracement phase and position price for a potential reversal.
However, the presence of multiple lower FVGs indicates that downside inefficiencies remain unfilled. After tapping the premium imbalance, the probability shifts toward a bearish continuation, where price seeks to rebalance these lower zones and target Sell-Side Liquidity (SSL) below the range.
Projected scenario:
Bullish move ā FVG mitigation (premium) ā liquidity sweep ā bearish expansion
Execution approach:
Wait for price to reach the upper FVG zone and observe lower timeframe confirmation signals such as CHoCH or BOS before considering short entries. This ensures alignment with smart money behavior rather than anticipating the move too early.
Invalidation occurs if price aggressively breaks and sustains above the premium zone, suggesting continuation rather than reversal.
Patience and confirmation are key ā let price deliver into liquidity before executing.
This is not financial advice ā always manage your risk.