Based on the H4 chart for XAUUSD (Simulated Gold), the market has been in a strong medium-term downtrend from the ~4580 highs. However, it has recently found strong demand and established a major support floor in the 3966 – 4000 region.
Currently trading around 4047.160, the price is showing signs of a short-term recovery, carving out a potential double-bottom or higher-low structure.
Here are two high-probability trade setups based on this price action:
Scenario A: The Long Trade (Bullish Reversal / Higher Low)
This setup capitalizes on the defense of the 3966–4000 support zone and the recent accumulation of higher lows.
Currently trading around 4047.160, the price is showing signs of a short-term recovery, carving out a potential double-bottom or higher-low structure.
Here are two high-probability trade setups based on this price action:
Scenario A: The Long Trade (Bullish Reversal / Higher Low)
This setup capitalizes on the defense of the 3966–4000 support zone and the recent accumulation of higher lows.
- Entry Zone: Market Price (4047.16) or on a minor pullback to 4035.
- Stop Loss (SL): 4015 (tight structural stop below the recent local consolidation) or 3990 (safer structural stop below the major support level).
- Take Profit (TP) Targets:
- TP1: 4090 (immediate minor resistance)
- TP2: 4120 (local swing high/liquidity pool)
- TP3: 4180 (major H4 resistance and key retracement level)
- Risk-to-Reward (R:R): Roughly 1:2.2 (using the 4015 SL and TP2).
Scenario B: The Short Trade (Trend Continuation)
This setup aligns with the dominant, higher-timeframe bearish trend, anticipating that the current bounce is merely a temporary relief rally before a deeper breakdown.
- Entry Zone: Upon a bearish rejection/wicking candle around the 4060 – 4080 resistance zone, OR on a clean H4 candle break and close below 4028.
- Stop Loss (SL): 4100 (above the immediate resistance cluster).
- Take Profit (TP) Targets:
- TP1: 3997 (recent support floor)
- TP2: 3966 (the major trend low)
- TP3: 3930 (extension target if the floor completely breaks)
- Risk-to-Reward (R:R): Roughly 1:2.5 (using an entry at 4060, SL at 4100, and TP2).
Key Observations
- The 4060 level is a critical pivot point. If H4 candles start closing convincingly above 4060, it opens the door for a rapid run toward 4120.
- If the price fails to breach 4060 and slips back below 4028, the bears will likely take full control to test the key 3966 support area again.
Attached Image (click to enlarge)
2
