Gold at 4,359–4,371 resistance — breakout or drop to 4,333? | XAUUSD Aug 10

Hey everyone, this is Daniel, your energetic prop trader. Gold is looking bullish today. We're in a range right now, but I see it as a corrective phase forming within an ongoing uptrend.

Last time, the key focus was whether price could break out above the previous day's high level. After price actually broke out to the upside, if we follow what happened next, we saw some pullback-style price action first, and then it rallied a full 708 pips, exactly in line with the scenario we laid out. In today's session for our community members, the read was that on the 1H chart this sideways range had formed, and right around the point where price was testing the upper edge of that range is exactly when we ran the community stream.

So right around here I was flagging that we should watch for a short-term pullback next, and now, as you can see, price has actually rolled over and started dropping. Using this range as our reference point, today I'm going into a lot more detail on the exact conditions for both a resumption higher and a reversal. Alright, let's jump right in as always and start with the daily chart.

Friday's daily candle, last week's Friday close, finished as a strong bullish candle. So what was the daily-chart scenario I laid out in Friday's stream? For the bullish case, I explained that this bearish pin bar right before tends to act almost like a doji, so it doesn't carry much downside conviction here.

As for how this plays out from the open, the bearish traders who likely went short on that doji-like bear candle are probably sitting in unrealized losses right now. So if price breaks out above this high, it naturally sweeps their stop-loss orders, and that momentum makes it easy for the upside swing to keep running. That was the core of the bullish daily-chart scenario I walked through.

Now for the bearish scenario, that's the case where price puts in a high around the same level as this doji-like bear candle and then reverses lower from there. And I explained that in that situation, there's a good chance the move down comes with some real downside momentum behind it, so the selloff can actually gather pace. So how did the market actually play out from there?

Well, price ended up breaking out above this high to the upside, so on the daily chart everything is unfolding exactly in line with our scenario, and that keeps us leaning bullish. From here I'd expect follow-through to the upside to come through fairly easily. Next let's drop down a timeframe and take a look at the 1H chart.

For the 1H, last time I put out the community-only stream right around this red line here, right as this bearish candle was forming, so that's the moment we're looking at. Let me walk you through what I was actually explaining on YouTube at this exact point, narrowing it down to just a few of the key takeaways here. There were a few key points, but the first one I was watching was the previous day's high.

If price broke out above it — and as of Friday that prior day's high was sitting right around here — then I said I'd keep actively looking for long setups, aggressively hunting for opportunities to buy into that upside continuation. On the other hand, if that breakout attempt failed here, I was thinking price would fall back into the range of that prior doji-style bullish candle, right here — so it would either dip back into this zone, pull back, and then push higher again, or simply return inside the range.

And there was also the scenario where, including the previous day's high, it behaves like a double top. Those were the developments I had on my radar. And as always, I walk through the full price action behind reaching this decision exclusively for our community members.

First, let's look at this reversal here. Price forms a bearish doji candle right at this spot, then breaks out to the downside, and from there the downward swing keeps extending lower. Notice this drop measures out to exactly the same range as the recent doji candle, so the doji is acting as a measured move here.

And since this bullish reversal candle got no follow-through on the very next bar, we can treat it as a doji as well, which confirms the read. Once this doji breaks out to the upside, it then builds a sell setup and rolls over into a rejection. At this point we can draw in our descending trendline, and if you look at this lower reversal candle down here, dropping the exact same slope onto it lets us map out a clean channel line running parallel.

With a move like this fully anticipated, we then look at the downswing that follows and it prints a three-candle follow-through, but they almost completely overlap, and while it did form a strong bullish candle, that bullish candle turned out to be a doji. Even a single doji can act as a trading range on its own, so if you look at this candle, you can see the price then shifts into a sideways range from there. Watch the moves inside this sideways range: price tested the upper bound with this small bullish candle, then dropped.

The momentum was strong, so you'd expect follow-through, but instead it printed a bullish candle and reversed. Looking at this bullish candle on its own, it does look like a buy setup, but the momentum from that big bearish candle right before it was so strong that normally you'd want to wait for another bullish signal to confirm. That's exactly how it played out.

After that, price built another bullish signal, forming a double bottom inside the range, and then it broke out above the upper boundary of that range to the upside. The upside follow-through has kept extending right up to broadcast time. Basically we were still inside a single upswing, so if price keeps clearing the highs from here, follow-through naturally becomes far more likely.

Once price clears these old sell-off points, that resistance-support flip tends to turn the level into fresh support, so this was exactly the scenario I had in mind. With that scenario in mind, here's how gold actually traded into last week's close: it broke out above the prior day's high, printed a single-candle pullback, and then kept pushing on to make higher highs from there. That single candle covered a full 70-dollar range, right around 708 pips, and price climbed exactly as our scenario had laid out, confirming the move.

In today's community-only breakdown, I walk through both the bullish and the bearish scenario, covering each one across these three key points. The first point covers the sideways range mid-uptrend and what a breakout signals for the next move. The second point walks through the post-breakout pullback and how we confirm the uptrend keeps going.

The third point covers a failed range breakout and how to read the range around its upper and lower bounds. I break down how to trade a strong trending market and how to operate inside a range. Right now, gold is stuck in a sideways trading range.

That said, given the recent uptrend structure, I'm leaning toward an upside breakout here. That wraps up today's gold update.