Market Summary for Friday 10.16: The XAU correction has completed after forming an inverted U-shaped top. Will the rebound face resistance again?
From the release of the CPI data until the PPI data came out last night, XAU fell sharply in response to the news. However, the market recovered quickly and showed extremely strong performance.
Let’s return to XAU’s chart action: XAU tested the 4207 level several times without breaking through. An inverted U-shaped top then formed, and the price retested the area near 4072, completing the correction pattern from the U-shaped top.
XAU is currently fluctuating within the 4207–4116 range. The 4172 level is horizontal support and also corresponds to the 0.618 level between the high and low. The price has now broken above 4172 and held above it, continuing its rebound.
The 4207 level is resistance at the top of the range and marks the inverted U-shaped top. Selling pressure is strong at this level, where trapped long positions and those waiting to enter short positions are likely to converge. The price is therefore likely to fail again when it reaches 4207.
The 4116 level is support at the bottom of the range. Although the price has fallen below it with its candle body three times, it has recovered quickly each time. Market makers are testing the strength of the support below and taking liquidity there.
Watch for an opportunity to sell at 4207. For a more cautious approach, wait for a confirmed breakout followed by a renewed decline, then enter short in the direction of the trend. The stop-loss level is 4259, with targets near 4155 and 4116.
$XAU
From the release of the CPI data until the PPI data came out last night, XAU fell sharply in response to the news. However, the market recovered quickly and showed extremely strong performance.
Let’s return to XAU’s chart action: XAU tested the 4207 level several times without breaking through. An inverted U-shaped top then formed, and the price retested the area near 4072, completing the correction pattern from the U-shaped top.
XAU is currently fluctuating within the 4207–4116 range. The 4172 level is horizontal support and also corresponds to the 0.618 level between the high and low. The price has now broken above 4172 and held above it, continuing its rebound.
The 4207 level is resistance at the top of the range and marks the inverted U-shaped top. Selling pressure is strong at this level, where trapped long positions and those waiting to enter short positions are likely to converge. The price is therefore likely to fail again when it reaches 4207.
The 4116 level is support at the bottom of the range. Although the price has fallen below it with its candle body three times, it has recovered quickly each time. Market makers are testing the strength of the support below and taking liquidity there.
Watch for an opportunity to sell at 4207. For a more cautious approach, wait for a confirmed breakout followed by a renewed decline, then enter short in the direction of the trend. The stop-loss level is 4259, with targets near 4155 and 4116.
$XAU