$XAUUSD

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The market structure on the 1-hour timeframe indicates a recent bearish displacement followed by a consolidation phase. Price previously broke down from the 3,885 region, establishing a swing low near 3,771.96. Currently, the structure is attempting to form a higher low base, with price trading at 3,839.85, effectively sandwiched between the 20-period WMA (3,830.08) acting as dynamic support and the middle Bollinger Band (3,834.51). The MACD histogram is printing shallow red bars, indicating waning bearish momentum, while the DIF line crosses the signal line to the upside, suggesting a potential structural shift toward recovery.

The most recent K-lines show a rejection of lower prices, with the latest candle printing as a solid green body closing near its high. Price has successfully reclaimed the 10-period WMA (3,833.19) and is pushing against the 5-period WMA (3,835.18). The Bollinger Bands are narrowing slightly after the recent volatility, implying a squeeze is forming. The TRiX and BRAR indicators show low volatility with a slight upward curl, confirming that the selling pressure has exhausted and buyers are stepping in to defend the 3,800–3,820 zone.

The current candle pattern is a Bullish Engulfing (or a strong continuation candle) where the green body completely engulfs the previous small red candle's body, indicating a shift in market sentiment from sellers to buyers.

My trading plan is to execute a long (buy) position on a confirmed breakout above the immediate resistance of the 3,845 level. I will wait for a 1-hour candle close above this zone to confirm bullish continuation. My entry will be around 3,846–3,848. I will place a stop loss below the recent swing low at 3,770 (risk management). My take profit targets are 3,870 (first target) and 3,885 (second target, aligning with the previous breakdown zone).

I predict that XAUUSD will hold the 3,820–3,830 support level and continue its upward correction. If the price maintains above the 20 WMA, it will likely test the upper Bollinger Band at 3,873.47. Given the MACD convergence and the positive BRAR reading, the short-term bias is bullish, with a potential retracement to the 3,860–3,870 range before any major bearish continuation.

What trade plan I follow and why

I follow a momentum-breakout strategy with a confluence of moving averages. I choose this plan because the price is currently above the 20 WMA (which acts as a support line) and the MACD is showing a bullish crossover (DIF at -9.75 crossing above DEA at -13.11). The Bollinger Bands suggest a mean-reversion move toward the upper band. Additionally, the BRAR indicator (BR: 50.82 vs AR: 44.67) suggests that buying interest is slightly stronger than selling interest, providing a favorable risk-to-reward setup.

When I start my trade

I will start my trade when the 1-hour candle closes above 3,845. This confirms that the price has cleared the immediate resistance created by the 5 WMA and the recent consolidation. If the price rejects at 3,845 and drops below 3,830, I will invalidate this setup and wait for a lower support test.

The recent price action displays a Bullish Harami or a Morning Star formation on the lower timeframe (15m/30m). On the 1-hour chart, the current candle is a Bullish Marubozu (a strong green candle with almost no wicks) following a small doji-like candle, signaling a reversal of the prior downtrend.

The final verdict is Bullish (Short-term). The price is recovering from the 3,771 low, supported by the 20 WMA, and the MACD is signaling a bullish reversal. However, caution is advised as the price is still below the upper Bollinger Band, and the overall trend remains fragile below 3,885. The trade is valid only if the 3,830 support holds.