Gold at 4,329 double-bottom — reclaim 4,362 or break to 4,324? | XAUUSD Aug 19

Hey, this is Daniel, an active prop trader. Gold looks bullish short-term today. Since last time, exactly as planned, price broke out below this sideways range, then dropped 792 pips heading into the Tokyo session open.

Right now, after that strong drop, we've seen two tests of the lows and a clean buy setup is forming up here. The key focus now is whether price can break above the Tokyo session high and flip into a genuine uptrend from here. That's the key level I'll break down in detail today.

Alright, let's dive into the daily chart first. On the daily, gold closed the prior session with a big bearish candle. The daily scenario I laid out in yesterday's video was the chance of a sideways range continuing, using these two candles here as the reference candles.

Also, in the near term, the push to test the high up here could be seen as having completed once this bullish candle formed, so that move looks done. After that, downside follow-through tends to kick in, and at the very least there's a strong chance we see a move that tries to test the low of this doji bullish candle we're using as our reference level. And if instead we break out above this sideways range to the upside, remember I explained that the height of this range itself becomes the measured move, and that's the factor that determines how far the extension can run afterward.

And as I mentioned earlier, yesterday's daily candle closed as a big bearish bar. So we can say the market followed through and tested the lower boundary of this sideways range. Normally, at a level like this, we'd expect to see a bounce fairly easily.

But since this candle formed as a big bearish bar, there's also a real chance we get downside follow-through from here instead. So the key takeaway here is that a breakout from this sideways range is now getting close, and we need to watch for it. The reason is this.

With a large bearish candle forming, downside follow-through becomes more likely, which raises the odds of a downside breakout from this range. But on the other hand, if today's daily candle closes bullish and prints a reasonably large body instead, then the picture flips. In that case, price would likely push higher by sweeping the bear-side stop-loss orders probably sitting around here and here.

And if that happens, an upside breakout from this sideways range becomes far more likely too. Either way, the key point is that on the daily chart, this sideways range is now approaching a genuine breakout opportunity. We'll also need to confirm this on a shorter timeframe, so let's move on and take a closer look at the 1H chart to see how price is developing there.

On the 1H chart, yesterday's community-only session was recorded and explained right around here, this red zone, where a bearish doji candle formed and price stalled out. In this YouTube video, I want to walk you through exactly what was explained there, going point by point so you can follow the full setup and the reasoning behind it. The first point here is that ever since this bullish doji formed as an outside bar, price has been stuck moving sideways in a horizontal trading range, going nowhere for a while.

And most recently, price actually attempted to break above that sideways range but failed to hold, rejecting right back down. So basically, I was explaining that within this sideways range there's a strong chance we see a downside breakout to the bottom. On the other hand, if that downside breakout fails, and if the low made during the Tokyo session also fails to break lower, Then at least heading into the New York session open, I said we'd flip and switch over to a bullish bias.

And in the community, I also went back over the scenario from two days ago to check how it played out, walking through how the whole price process actually unfolded. First we had this sideways range forming, but then after the upside breakout attempt failed here, a buy setup formed, and price attempted to break out to the upside once again here. On the breakout move that followed, I'd originally said to watch how much each new high extends beyond the last.

If those new highs start narrowing, that points to a wedge forming, or a classic three-push-up pattern taking shape. I flagged that we should watch out for the move rolling over into a decline. If you factor in the high printed at the Tokyo session open, you can see it formed a clean, complete wedge.

On top of that, the wedge high gave us an obvious sell setup, printing a really clean reversal high right there. And the recent uptrend line broke down to the downside too. At this point we can flip to a bearish bias, and with such a big setup forming here, Normally, if you sold here, around this area, you'd naturally place your stop loss right up here.

The distance ends up being pretty wide here, though. Normally, you'd expect price to come back, test this level once more, and then push lower from here. Even from this unfavorable spot, the bears stayed aggressive, as you can clearly see on these two candles here.

Selling pressure kept building, with steady downside follow-through. Within that move, price printed an outside bar that looked corrective. Given that it fed into a sideways range, the setup basically favored a downside breakout, and that's the picture we were left with.

So how did gold actually move after we posted the analysis? Right on cue, price broke below this sideways range and the downswing kept running into the Tokyo open. That's a move of 79 dollars, or 792 pips to the downside, playing out exactly as our scenario called.

Alright, let me walk you through three key points from today's community-only broadcast content for our members. As always, I'll lay out both the bullish and the bearish scenario for you. Right now, as I said, my main bias stays short-term bullish.

After that sharp drop, the low got tested a second time, and both times we saw really clean buy setups forming. So we've now got clear signs of a reversal forming here. The first thing to watch is whether we can break out above this Tokyo session high.

Breaking above this level qualifies as an uptrend reversal under the modified Dow theory definition. So on the 1H, the bullish outlook stays firmly intact. But if the breakout attempt fails here, price should slide down while respecting the major downtrend line.

So we're switching back to a bias that follows this downtrend. We're right at a key price zone, waiting on the 1H candle to close in about 20 minutes. That wraps up today's gold analysis.