In the current XAU/USD market scenario, a notable decline has been observed since the Asian trading session commenced. The price action witnessed a significant break below the crucial EMA 200 level, subsequently rebounding towards the EMA 50. However, this rebound appears to be constrained by a multitude of bearish signals manifesting on the chart.
One of the primary indications of the prevailing bearish sentiment is the emergence of bearish divergence signals. Despite XAU/USD prices forming new higher highs, both the RSI and MACD oscillators are signaling lower highs, suggesting a potential weakening of bullish momentum. Furthermore, the appearance of bearish engulfing candlestick patterns has delineated significant resistance zones. For a prospective bullish reversal, prices must successfully breach above the high of the initial engulfing candlestick pattern at 2034.79, coinciding with the upper boundary of the volume profile value area.
In order to confirm a robust bearish reversal, it is imperative for the market to decisively breach below the lower limit of the volume profile value area, currently situated at 2013.54. Additionally, the occurrence of a bearish death cross on the EMA 50 and 200 would further fortify the bearish narrative.
Taking a holistic view, the XAU/USD bulls are exhibiting signs of exhaustion as prices approach pivotal support levels. A breach below these critical levels would not only validate the bearish signals observed but also potentially signal a shift in the prevailing trend towards a bearish trajectory.
1. XAU/USD experiences notable decline, breaching EMA 200.
2. Bearish divergence signals suggest weakening bullish momentum.
3. Engulfing candlestick patterns highlight significant resistance zones.
4. Confirmation of bearish reversal requires breach below volume profile value area.
5. XAU/USD bulls show signs of exhaustion near key support levels, signaling potential trend reversal.
Forecast -0.2% vs Previous -0.4%
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