Gold at 4,416 — bulls sweep stops to 4,435 or fade to 4,356? | XAUUSD Aug 12

This is Daniel, active prop trader. Gold's still bullish on the bigger picture today. Since last time, the pullback buying setup we flagged has worked cleanly.

From there we've confirmed a clean 472-pip rally running into the New York session open. Right now we're pulling back from the highs, but the bigger uptrend is clearly still intact overall. I walked you through how far this pullback might run, and the exact levels that would flip me bearish here.

So let's dive right in and go through the daily chart in detail. Now, looking at the daily chart here, the scenario stays really simple, so let's see. Last time I explained that as long as the bullish bias holds and we don't form a clear reversal candle, there's really no need to switch our view on the daily chart.

So the bias is still tilted to the upside, but yesterday's daily candle actually closed as a bearish doji, a small-bodied reversal signal. From this bearish doji closing on the daily, there are two takeaways worth noting. First, the bears are likely pushing far more aggressively than they did on the previous reversal attempt.

You can read that pressure directly from the sheer size of this bearish candle's body. Now the second key point is what happens next, and basically this bearish doji is unlikely to work as a reversal setup here, so I wouldn't count on it flipping the trend. The scenario I'd lead with, my main scenario, is a move that plays out just like these two candles right here.

The bears who saw this reversal-looking price action and rushed in early, opening short positions right here. At the stage where price sweeps those stop-loss orders and breaks out above the prior day's high, momentum builds and we could see a big bullish candle form just like this I'd say this is the scenario we can realistically consider the most likely one right now. But we always have to keep both directions in mind, so let's cover the bearish case too.

For the bearish scenario, today's daily candle could close by matching the previous day's low, forming a flat base there. Or alternatively, price could set a lower high, and then break out to the downside below the previous day's low. If that scenario plays out, we'd then need to flip our bias and switch our directional view.

Okay, that wraps up everything on the daily chart, so now let's switch our timeframe and take a close look at the 1H chart. Yesterday's community-only session was right here at this red line. On timing, I ran that session right around when the first 1H candle of the London session open had just closed and confirmed on the chart.

Let me walk you through what I covered there, picking out just a few of the key points to share here on YouTube. First off, the price action recently was clearly building out a bullish setup here on the chart. And the exact spot where this setup formed is a really crucial point to notice here.

So basically, this was a pullback-style candle that pushed up to test the upper edge of the sideways range that had been dominating and controlling this market for quite a long time, all the way up until the prior day. And then again, if we zoom out further and look at the chart from a more macro perspective, we're clearly in a very long-running, well-established uptrend here. So these kinds of buy setups tend to work out pretty well here.

So the odds favor further upside from here, which is why I've been leaning bullish and keeping my main scenario to the upside. That said, I do need to keep the alternative in mind too, the scenario where price flips into a proper downtrend from here. With the recent up-swing carrying this much momentum, one single down-swing forming doesn't mean much on its own here.

We still haven't seen the lows getting cut lower, and there's no clear lower-high action confirmed yet either. At the very least, we'd want to see price come back and test the origin of this prior downswing, where the last reversal happened, before we even start thinking about flipping to a bearish bias here. Or unless we get price action that starts printing lower highs, a clear shift toward downside momentum, until we actually confirm that kind of setup, my point was that you really shouldn't be flipping your bias to the bearish side just yet.

I'm also watching how price behaves on the way to that decision point. What really catches my eye on the current chart is this strong bullish swing forming. Where did this happen?

Right here, at the reversal low created by a failed downside breakout of this sideways range. It closed in a really clean, easy-to-read way, almost a full bearish marubozu with barely any wick. Then the very next candle got bought up hard and one-directionally right from the open, and that price action gave us a genuinely reliable buy setup worth trusting here.

At the top of this sideways range we also see a small bearish doji forming. With this small bearish doji forming right here, we can realistically consider setting up trades in both directions. By placing stop orders just beyond both the high and the low, you can ride the breakout comfortably in whichever direction it fires.

That kind of setup made it really easy for the bulls to load up on longs, and I think that's exactly what sparked this current uptrend and gave this rally swing its strength. Given that kind of price action, the basic plan was this: whenever price dropped back into a reasonable zone and printed convincing price action right where you'd expect it, that was a spot to aggressively load up on longs. So factoring in that whole process, I was building my scenario around a bullish bias from the start.

So how did it actually play out? In the end, that buy setup was validated cleanly, we got price action confirming the bulls stepping in and taking control, and from there price ran up by a solid $47 range, roughly 472 pips to the upside — a really clean confirmation of the whole bullish scenario. Now, I always say I like to flatten my bias around session changeovers, but price kept drawing a clean upward swing right into the New York open, then flipped, and ended up printing a higher low.

Today the Tokyo session opened with strong buying pressure from the very start, and now we're shifting into this current pullback phase. So for today's community-only breakdown, let me highlight three key points, starting with this short-term downward swing correction, which is exactly what we're covering right now. On the bigger picture, the uptrend is still intact, so I walked through hunting pullback buys by reading the price action at the top of this sideways range and the lower edge of the bull channel, and I explained the exact criteria I use to decide when to flip my bias bearish.

Most recently we've seen a reversal-low style price action form, and now the market looks like it's gearing up to make another push higher to retest the Tokyo session high. Still bullish overall, and that wraps the gold analysis.