Gold at 4,440 — break the high or slip to 4,422? | XAUUSD Sep 3 plan

Hey, this is Daniel, an active prop trader. Gold's looking bullish today. Since last time, price broke out above the Tokyo session high, so my bias flipped to the upside.

After that, if you look at the 1H timeframe, from this entry point up to the recent high, we've rallied about 957 pips worth. So the big question today is whether gold keeps pushing and takes out that recent high, or fails to rally and breaks down below the Tokyo session low. That's the key level I'm watching closely.

Alright, let's dive right in and start with a close look at the daily chart. Gold's daily candle from yesterday closed as a bullish candle. Now, for the daily scenario, here's what I'd shared with you previously.

First, at this point we've already tested the lower boundary of the daily chart's sideways range, so a bounce becomes easier to see there. And since the downside momentum up to here had been very strong, a rebound was likely too. But because the upside and downside momentum were roughly equal, I told you that a move in either direction was genuinely possible from here.

Given this kind of price action, setting a greedy take-profit level would've been risky, so I told you the take-profit had to be handled very carefully here. Rather than chasing a break of the highs or lows outright, the better play was to wait for the pullback after that break and re-enter there on the second attempt. So how did the daily chart actually move?

As I mentioned, it closed as a bullish candle, and once again we saw a bounce right off the lower boundary of the daily range. So my short-term bias here is to the upside. That said, if you're hoping for higher highs and want to hold a position for a long time, keep in mind the downside momentum up to this point was very strong, so honestly it's not a great fit for that kind of trade.

Just like the day before, my read is that this is still best played on a day-trade timeframe or lower, rather than holding for the long haul. So with that in mind, let's switch over and take a look at the 1H chart together now. On the 1H chart, my last community-only session was recorded right around where this bearish candle marked in red formed.

To sum up the key points I covered there: the previous daily candle had closed as a bearish candle, and looking back at the downside momentum leading into that session, it was really strong. So my core stance was bearish, and I told everyone I was prioritizing rally selling on the way up. That said, the one concern I flagged at the time of yesterday's session was that the descending trendline had already broken out to the upside, and that was really the standout factor worth watching.

Price reversed from around the low made during the Tokyo session and broke out above the Tokyo session high. This black bold line I've drawn marks the previous day's Tokyo session high, and I explained that if we get a move clearly breaking above this level, we'd switch our bias to the upside. And as always, in the previous session I walked through the price action step by step, right up to the process that led me to this exact judgment.

The first point I was watching was right here — after that strong drop we saw, the area just in front of it, sorry, let me correct myself, this level right ahead of the move is what really caught my attention. One of the key origins for this strong downward swing was the move that rejected this bullish reversal candle right here. And as I mentioned in the broadcast two days ago, the lower boundary of this sideways range isn't really an area that traders watch as a reliable base for a bounce.

So the real trigger for this drop was this rejection of the bullish reversal candle here. This was a spot primed to fall hard by triggering the bulls' liquidations, and on top of that a bearish doji formed here, so the drop got amplified as it swept the stop-loss orders on the long positions the bulls had placed down at this lower wick. After that the down swing kept extending, and looking at the internal price action you can see spots where the bulls looked ready to step in — one, two reversal candles — yet each got broken to the downside, which told us the bears were still firmly in control.

The fact that price sold off this hard tells us the bears were aggressively piling into shorts. So if a reversal did kick in from here, it would naturally sweep the stop-loss orders sitting above from all those aggressive short sellers, and that's exactly why any move after the turn tends to look sharp and powerful. Also, at the time of the broadcast, price had just broken out above this trendline, which was the origin point of that earlier downtrend.

So the high of the Tokyo session was a genuinely valid level to flip our bias to the upside from, and that's exactly how I was reading it at the time. After the broadcast, gold reversed exactly as expected, and once it cleared the high of the Tokyo session, momentum turned clearly stronger. From there, flipping our bias to the upside became the natural, obvious read on the move.

On the 1H chart, the entry point is this doji candle right here. You'll often see a doji form near a key level like this, marking a decision point in the market. Naturally, in this case you can place a buy stop above the high and a sell stop below the low.

I've explained this over and over for the community. And the market actually broke above that high, forming a big bullish candle. From the doji high that marked our entry point, all the way to the high printed into the Tokyo session close, price ran up 95 dollars, which is a full 957 pips.

In today's community-only briefing, I walked through both the bearish and bullish scenarios around these three key points, as usual. First off, with the uptrend continuing as our base case, I'm watching whether price can break this recent high right here. On the second point, if we drop, I'm watching for a reaction where several key levels overlap.

That's a zone where price tends to find a floor this time, and I walked through concrete examples of it. And on top of that, if the upward momentum starts to fade, I'm also on guard for an early reversal here. So even if we push above the highs, it's not a situation where you can relax just yet. That's how I've broken it down today. And that wraps up the gold analysis.