XAUUSD: Gold breaks out above 4,009 — does the pullback hold for longs? | July 1

Hey, active prop trader Daniel here, and gold is looking bullish today. We're seeing a clean upside breakout above this sideways range here. If this pullback holds up, we can enter longs right here.

As long as price doesn't slip back into this range, my bias stays bullish here. Yesterday, right on plan, price broke out below the sideways range. Then a pullback kicked in, and it dropped a full 530 pips lower.

Even the internal structure showed two clear swings down before falling. That's what I was explaining, dropping after two clear swings down. It's forming a doji right on the key line that defines this recent sideways range.

Alright, let's dive right into the daily chart breakdown from here. Gold closed as an inside doji candle, confirming yesterday's daily setup. So it's an inside doji, confirming yesterday's overall flow continues.

The daily chart also confirms it was a sideways range. Looking at these doji candles, near the top of the range the sell bias gets stronger. And the closer we get to the range floor, the stronger the buy bias becomes.

You should factor this in as one input when building your short-term plan. That's worth keeping in mind, and the body also closed as an inside candle here. Since the recent trend is downward, I'm leaning toward a downside breakout here.

I see that as the more likely scenario here, and given this is such a large move Since this is a large-sized doji, planning trades at the daily level right now is going to be pretty tough here, so let's look at the daily That wraps up this part, so now let's move on to the 1H chart and watch it closely. As for the watch levels, this is what I shared with the community yesterday. Let me share just a part of it now.

First off, the bias I talked about yesterday. What I saw first was the bias itself, with the big upward swing now finished. After that, I'm expecting the market to form two more downward swings from here.

Short term, stay cautious since the market may struggle to pick a clear direction. In yesterday's community stream I covered this red line, the lower part. I was watching where price formed that slightly longer wick, but just before the Tokyo session.

Into the market close the demand got confirmed, and we saw this strong move higher. A swing was formed here, and looking at the internal price action too, likely we'll likely see a two-legged move, so this upside swing if this leg ends, momentum's this strong, so short-term we'll see a sideways range forming, then two downside swings, the so-called two-leg move This kind of corrective pullback was fairly likely to develop here, and beyond that just to add on my bias, short-term I lean short Short setups dominate, but longer-term

I'm watching for a breakout above key levels I had a scenario ready to confirm direction first, then switch over to the long side And as always, I'm running through my usual daily market recap here So let me walk you through exactly which key points I was focusing on The first one is this doji candle right here, and what this doji tells us is it marks the starting point of the range breakout move But below these doji candles, you can place a stop-sell

order to catch the move Traders working inside this range were building positions and once it's hard to close, price needs to break out These breakout moves tend to appear once longs pile in sweeping in their stops and accelerating the drop lower So we place stop-sell orders right below the doji candle here That's the kind of strategy you can put together here, and then Then the price action after that keeps stepping the range lower, forming a trading

the market is likely to build a trading range here and after price actually dropped through that structure, a selling climax appeared and then price reversed — that's the flow we've seen so far That's how the market's been moving, and recently, right off these doji points here long entries have opened up, and this powerful surge starting to develop here Inside our community I broke down this whole process in full detail And yesterday I also walked

through the most recent price action We saw that climax candle, a clear climactic move here That small candle after it closed as an inside bar to the prior one So next we had the setup for an IoI pattern, inside outside inside forming here So there was a strong chance that pattern would form, is what I explained After that inside bar, an outside bar actually formed here Now the tricky part comes next, as the lows kept getting cut lower, the real body

formed just an inside bar, so this is a half-baked, weak signal here After that, the follow-through bull candle made it tough to enter a long here Adding that second push here, it was the classic second test So it was a setup where that move tends to happen. Then a reversal candle formed. After the downside breakout, price pulled back recently.

Then price dropped hard into a selling climax candle, followed by consolidation. Then it formed a base and now we've reached a rectangle breakout as a result. Price action played out exactly like this, right along the sideways scenario.

Break below the range, and price drops around 530 pips straight down. We saw that play out, with the internal structure showing two swings. Alright, today's session here is for our community members.

Today we're covering the fight after this selling climax candle, plus the range. I was explaining the criteria for flipping your bias in a range. But price already broke out to the upside in a very clear, clean way.

The move that flipped my bias to bullish has already played out. So right now, price is playing out exactly along the scenario I laid out today. I'm still leaning bullish here. That wraps up today's gold update.