On February 23, the price of gold against the US dollar (XAUUSD) experienced some interesting movements. Initially, the price went up, but after some news came out, it started to fall. This fall occurred right at a resistance level, leading to what looked like a breakout. However, this wasn’t a true breakout; instead, it was misleading and ended up being a fake breakout.
XAUUSD Context
After facing rejection at the resistance level, XAUUSD quickly moved downward. This movement is what traders call an impulse leg down. Based on this action, I think the market is likely to keep moving downward, resulting in a pattern known as a two-legged pullback. This pattern involves the market dropping, making a slight recovery, and then dropping again.
There is also a chance that the market might not continue to move down or up but instead enter a sideways movement. This kind of movement is common after a sharp directional move, as the market tends to stabilize and move within a certain range.
Furthermore, on the daily chart for February 23, we can see a long-tailed bar. This is an important indicator because it shows that the sellers, or bears, have strong control and are pushing the price lower.
XAUUSD Trading Idea for 23 February 2024
My objective is to reach the support level at 2014.55. I’m aiming for this level as it represents a point where the downward movement might pause or the market might start to recover.