XAUUSD at 4,093 outside bar — breakout to 4,116 or range back to 4,028? | Jul 30

Hey everyone, Daniel here, your active prop trader. Gold's looking bullish today. Just like the scenario I shared with the community, price built a sell setup at the top of the bear channel, then ran a clean 518 pips lower exactly as planned.

After that, price reversed right at the New York open, broke above the London session high, and flipped into a clean uptrend. The recent action put us at a key spot: does the pullback-driven uptrend continue, or do we drop back into a range? As I called earlier for the Trading Lab community, price pushed above the highs, and even now on the daily it's still printing higher lows.

So let's dig into the daily chart in detail, as always. On the gold daily chart, yesterday's candle closed as a bullish doji, with the open and close nearly the same. As the main daily scenario I laid out yesterday, if this downside momentum held, I was expecting price to head lower and go back to test the most recent swing low right here.

And realistically, I told you the most likely outcome was a sideways range forming off this bullish doji candle as the anchor bar, and that's exactly the scenario that's now playing out, just as I mapped it out for you. Thanks to what we call the magnet effect, price keeps getting pulled back and capped around this doji candle's sideways range, so the real body stays contained, and that tells me this is developing exactly along the scenario I laid out.

That said, there's one point I want to correct here. I'd been treating this as a sideways range anchored on that bullish doji candle, but yesterday's daily candle actually broke higher, taking out the previous high, and it pushed above that level too. It also took out the previous low on the downside, so overall this qualifies as what we'd call an outside bar on the daily chart.

So the direction on the daily chart won't really become clear until we get a clean breakout above the previous day's high or below the previous day's low. Basically, for today as well, keep in mind that the range is likely to keep widening and this trading range environment should continue for a while longer. Now let's move down to the 1H chart timeframe and take a closer look at it.

On the 1H chart, yesterday's community-only stream covered the market right around where this long-upper-wick bullish candle formed here. Let me pick out a few of the key points I walked through on YouTube and break each of them down for you now. So first, on my directional bias: as of yesterday's stream we already had an upside swing forming, so on the very short-term timeframe I was leaning bullish here.

At the same time, I'd set a clear trigger for flipping my bias. The key level was the upper edge of this bear channel, and if price broke out above it, we'd shift into full breakout mode, where the market has a high chance of extending this upside swing much further and running for longer. We'd shift into a strategy of picking up pullback buys on a candle-by-candle basis.

On the flip side, we've ultimately built a sell setup here, and I explained that once a setup like this forms, we flip our bias to the downside and expect the downtrend to keep running, targeting at most the lower boundary of this bear channel as the extended objective. And I walk you through the entire thought process step by step, every move that led up to this whole series of trading decisions. Where I started the breakdown was right here, from this bullish reversal candle, and after that reversal candle a sideways range formed, and then we got a clean breakout.

From this breakout I was basically keeping a bearish bias in mind, and looking at the internal price action, the first follow-through ended and formed a sideways range right there. After this sideways range failed to break out, price came back exactly to my previous sell entry point, built another sell setup right there, and dropped again from it. In the price action after that, another sideways range formed, and it was clearest right after this doji bullish candle and the long-upper-wick bullish candle.

As I often put it in my analysis, these two candles served as the reference candles, and a sideways range had formed right off of them here. Since attempts to follow through to the downside failed at least three times here, for now I've reached the conclusion in my analysis that we should lean toward an upside bias. That said, the opposing downtrend hasn't broken yet, so I'll also keep the levels where selling tends to kick in as a key axis for flipping my bias.

As I said earlier, if the up-swing keeps going and price breaks out above the top of the bear channel, I'll grab a lower pullback and look to set up a long entry. On the flip side, if we get a clean selling setup here instead, just flip your bias and start hunting for a short entry. That's the setup where selling was the play I walked you through.

So how did the market actually play out? Just as I showed you, price formed a selling price action at the top of the bear channel and reversed lower. Heading into the New York session, price dropped a full $51 range, about 518 pips, playing out exactly as the scenario I laid out predicted.

As for the New York session open too, this candle right here is exactly the opening candle of that session. So I've drawn a vertical line right here at the New York session open like this. Right around the typical first two hours after the open, it formed a reversal candle, then reversed and flipped the trend upward, so a really clear, easy-to-read move.

So for today's Trading Lab members-only session, first I'll cover the bias rationale I mentioned and scenarios for both directions. I'll walk you through these three key points in detail. So what I'm covering here is the breakout of a sideways range, the failed breakout, and how to read pullbacks with real chart examples The second point is the process, from a strong rally all the way to a sideways range forming And the final point is the current scenario, assuming this pullback plays out I've marked PB here, and lately this candle has been acting as a pullback Not many price action traders can actually read this move as a pullback here.

After this pullback move, price broke out above the most recent swing high here. Right now the candles keep printing higher highs, extending the move. For gold today my bias stays bullish for now, and that wraps the stream.