Gold nailed its pattern target and slammed into a wall. With 4150 under fire again, the market’s next big signal is coming fast.
The inverse head-and-shoulders pattern highlighted in yesterday’s Lab Note played out cleanly, and price moved almost exactly into the projected upside target, which is a good confirmation that market structure continues to respect the key levels I've been tracking.
After tagging the target zone, gold saw some profit-taking, which led to a shallow pullback and a retest of the previously broken 4150 area. That level withstood the selling pressure, and buyers came back, pushing the price higher.
But what’s next?
Let’s examine the 4-hour chart first.
From this perspective, we see that gold tried to recover before the beginning of the U.S. session, but sellers immediately stepped back in, driving price right back into the 4150 zone once again.
The rejection wasn’t random, and the daily chart provides the missing context.
Looking at the chart above, we see that price climbed directly into a major resistance area (created by the upper border of the green triangle and pro-bearish red gap [4175-4194.50]), so it’s no surprise that sellers defended it aggressively - especially right after the inverse head-and-shoulders from yesterday completed its projected move.
Additionally, a breakout above this area could open the door not only toward the well-known 4200 resistance zone (reinforced by the combination of two important Fibonacci retracements marked on the first chart), but potentially toward the recent high.
That’s exactly why this battle is so important – because the outcome in this region may dictate gold’s next several sessions.
Bullish Scenario
Buyers defend 4150 again and produce one more upswing into the nearest resistance zone. A clean break above the red gap and 4200 would reopen the path to 4250 (at this point, it’s worth keeping in mind that this scenario requires bulls’ conviction – especially when we take into account the fact that the last two attempts were rejected sharply).
Bearish Scenario
If bulls fail to hold 4150, we’ll likely see further deterioration and a pullback even to the 4105–4115 support area.
Final Thoughts
Gold is currently trading right inside a major decision zone, where both sides have clear incentives to defend. The proximity to the mentioned key resistance area makes this a high-risk, high-information area, and traders should stay alert.
Thank you.
Anna
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