Gold at range lows 4,334 — bounce or break to 4,399? | XAUUSD Sep 21

Hey, this is Daniel, an active prop trader. Gold looks bullish today. Price broke down below that doji we were watching, so we needed to flip our bias to the downside.

After that breakout pullback, price dropped about 458 pips. Right now we've got a trading range forming, and after a buy setup came off the lows, that low is being tested again for another possible breakout. So the key question is whether we get a bullish reversal candle here that pushes price from the bottom of the range back up to test the top, or whether we break lower instead and accelerate the downswing that started late last week.

Alright, let's dive right into the daily chart as usual. On gold, last Friday's daily candle closed as a bullish candle. The scenario I'd laid out was that a breakout above this doji was fairly likely, but even though we formed this big bullish candle and pushed the highs up, the real body has pulled back inside, so price ended up closing back within that prior range instead.

Given that backdrop, we still couldn't confirm a clean breakout above this doji just yet. On the price action side, if we do manage to break above this high, the expectation was that price would then come up to test the next obvious swing high above. As for the bearish scenario, if we'd been left with a bearish real body instead, it becomes easy for price to shift into a sideways range using this doji as the reference candle.

In the end, price closed on a bullish candle, and that bullish close basically keeps the bias tilted to the upside. From here, the clean bullish scenario would be a pullback down into the closing area of this bullish candle, holding there, and then continuing higher. That said, honestly the bullish momentum isn't all that strong here.

The higher highs are only advancing by a very narrow margin, momentum is weak, and the candles are closing almost fully overlapping one another. Because of that, there's a real chance this turns into a failed breakout. If this pullback fails as well, price could easily slide into a sideways range that sits inside this candle, tucked right inside that doji-style bearish close.

So with the daily chart giving us no clear directional bias here, let's drop down and check the 1H timeframe next. Last weekend's community stream landed right here, at this red line, on that indecisive doji candle. For what I covered at that point, here on YouTube I'll keep it focused on the key takeaways and walk you through them just like this.

First, on the 1H chart, at the time of that broadcast last weekend we had a clean uptrend still in place, and even the bigger-picture swing highs were stepping up nicely too. Given that backdrop I answered that I was leaning bullish, but I stressed the real pivot was which way this recent doji ends up breaking out from. If price keeps climbing from here, tying together this bearish reversal candle sets up an easy path toward a classic three-push-up pattern forming on the chart.

I said price would likely wrap up by taking one more test of the Tokyo session high. As for the bearish scenario, that's naturally if price breaks below this doji line here. If we get that move, I mentioned that in the very short term, around the 4,370 level here is likely to act as a key pivot point.

After that, I said to watch the breakout pullback and see if a downswing and downside follow-through actually develops. There's also a chance price reverses off this key level where the breakout failed, forming a double top. I'd even explained that a double top forming would flip my bias back to the downside.

So how did gold end up moving? Exactly as I'd called it, right in line with my scenario. Once the doji broke to the downside, price reversed just ahead of the 4,370 level, and after that the breakout pullback against the doji line completed cleanly.

As of the close last Friday, we've confirmed a decline of roughly $45, which works out to around 458 pips. We also saw strong buying into the close as positions got squared off. As scripted, this fed straight into a double-top formation, and that in turn set up today's downward swing lower.

So this played out exactly as the scenario called for. In today's community briefing I'll break down these three key points across both the bullish and bearish scenarios. Right now we're seeing a reversal move inside the range, so the focus is whether this recent bullish flow can keep going.

If this reversal fails, we may shift to a bearish view. Today, price is trading right down near the lower boundary of this broader trading range. Will we get a clean bounce here, or break lower, then see a pullback afterward?

Watch closely to see whether this double top confirms and prices push sharply lower from here. The 1H candle closes in about 12 minutes, and personally I'd rather wait for that close before judging where price heads next. That wraps up today's gold session.