FX.co ★ Sajidctn | XAU/USD, GOLD

2-hour Gold Spot (XAU/USD) Analysis Price Structure & Zones The chart highlights two key rectangular zones: 1. *Resistance (red box)* around 4,450–4,475, where price previously rejected and formed a high (4,411.97 at 0.5 Fibonacci). 2. *Support (green box)* near 4,286.31 (0.5 retracement), acting as a demand zone that held earlier price swings. These zones act as order‑block areas where institutional liquidity sits. A break above the red zone would signal a bullish continuation; a break below the green zone flips the bias to bearish, as shown by the blue (up) and red (down) arrows. Support & Resistance Analysis *Support*: The green zone represents an equal low area where buyers historically stepped in, forming a strong demand block. *Resistance*: The red zone is an equal high/ supply block that capped previous up‑moves, creating a sell‑side liquidity pool. *CHOCH (Change of Character)*: The sharp drop after touching resistance indicates a character shift from bullish to bearish, suggesting the market structure has broken the prior uptrend. Volume Indicator Volume should be checked to confirm the strength of moves: Rising volume on the downward candle validates the bearish breakout from the resistance zone. Low volume on rebounds would signal weak bullish attempts, reinforcing the bearish bias.

RSI (Relative Strength Index) The RSI (not shown directly on the chart) would typically be used to spot overbought/oversold conditions: If RSI was above 70 near the resistance, the market was overbought, supporting the sell‑off. A dip below 30 at the support zone would indicate oversold conditions, possibly triggering a bounce or consolidation. Inducement & Order Blocks *Inducement*: The price sweeps the equal high (red zone) to lure buyers (induce longs) before reversing sharply down, trapping late buyers. *Order Blocks*: The green and red rectangles are institutional order blocks. Trading the break of these blocks (with confirmation) gives high‑probability entries. Equal Highs/Lows & CHOCH *Equal highs*: The red zone aligns multiple rejection levels, forming an equal high supply area. *Equal lows*: The green zone marks an equal low demand area. *CHOCH*: The market changes character after breaking the equal high, signaling a shift from accumulation to distribution. Risk Management 1. *Position sizing*: Risk no more than 1–2% of capital per trade. 2. *Stop‑loss placement*: Set stops just outside the opposite block (e.g., above resistance for shorts, below support for longs). 3. *Target*: Measure the risk‑reward by projecting the height of the range (resistance – support) and aiming for at least 1:2 RR. 4. *Confirmation*: Use volume spikes and RSI divergence to confirm entries before acting on CHOCH. Trading Outlook for Gold *Bearish scenario*: Break and close below 4,286 triggers a move toward lower liquidity zones (red arrow target). *Bullish alternative*: A clean break above 4,475 could invalidate the bearish setup and push price toward new highs. Actionable Steps 1. Mark the support/resistance blocks and wait for a candle close outside them. 2. Check volume and RSI for confirmation of the breakout. 3. Place entry on CHOCH with a tight stop and defined target based on the order‑block height. 4. Manage risk by adjusting lot size to maintain