In today’s technical analysis, let’s take a look at gold, which is currently testing a very important resistance zone.
This yellow-marked area has already proven its strength. It was tested in the previous week and triggered a drop. Now we are seeing another test, and once again, the reaction is not encouraging for buyers.
The latest price action shows a clear rejection. The candle formed at this resistance has a long upper wick, highlighted with a blue rectangle. That kind of structure usually means one thing: buyers tried to push higher but were overpowered by sellers.
So how do we approach this setup?
As long as the price remains below this yellow resistance, the sentiment is negative and favors short positions.
However, for a stronger and more reliable signal, we should wait for confirmation. That confirmation will come with a breakout below the red uptrend lines, which are currently supporting the bullish correction.
If those lines are broken, it would mark the end of the correction and open the door for a stronger move to the downside.
Until then, the rejection at resistance already gives an early bearish signal, but the full confirmation still lies ahead.