Gold at 4,291 support — breakdown extends or 4,327 reclaim? | XAUUSD Sep 23

Hey everyone, Daniel here, a working prop trader. Short term, gold is leaning to the downside today. Since last time, price broke out above the prior day's low, and just as I mapped out, the bias flipped bullish.

After that we got a clean reversal candle, and gold rallied about 623 pips up toward the recent high. Right now price has reversed after overshooting a rising wedge and it's flipping into a downtrend, so my main scenario is a move down to test that recent key low. The question on the 1H is whether this downtrend keeps rolling, or whether price breaks above the recent high from the Tokyo session and swings us bullish again.

That's the key spot I'll be watching closely here. So let's dive straight into the daily chart. On the daily, yesterday's candle closed as a bullish doji, essentially a green candle with barely any body.

As for the daily scenario I gave you yesterday, this bearish candle strongly suggested a failed breakout-pullback against the prior bullish candle, so from that point on we were shifting our bias to the downside, expecting sellers to take control. In terms of key levels, we had three of them stacked up here: the opening price of that prior bearish candle, then the low of the bullish candle, and finally the low of this doji, so those three zones lined up as our main reference points to watch.

If we get a bullish candle that completely fills the body of that prior bearish candle, we can read it as a fakeout on the downside, and by sweeping the stop-loss orders the bears placed here, price would then have room to push higher from this point. On the other hand, if it closes below the low instead, that basically signals a return back inside the range, and from there we'd be watching how price reacts against those earlier key levels we mapped out.

In the end it closed as a bullish doji, and given how this candle formed, the first thing to factor into your trading is the likely buildup of a sideways range using yesterday's doji as the anchor candle — that's the scenario we should be preparing for right now. Also, the prior day marks a key level right at the open of this bearish candle here. It nailed that spot precisely with a long lower wick, so on the daily chart the bias is leaning slightly to the upside right now.

Going forward, if price clears this high, on the daily chart you could wait for a breakout and pullback back to that broken high, and then look to enter long from there. If price instead breaks out to the downside, we still have this same range around the doji line, so a clean, smooth drop lower feels hard to imagine given the current setup. With all that in mind, let's now dig into the 1H chart.

On this 1H chart, the red line marks exactly where price sat when I ran yesterday's members-only broadcast for our community. On YouTube, I want to focus on exactly what I was breaking down for members at that moment, and walk you through that same analysis here on the video. Right now we had a downtrend-ish move going since the London session open, so I was telling everyone the bias here leans clearly to the downside.

At this point both the previous day's low and the low set during the Tokyo session had already broken out to the downside. So if price rallies from here, one pullback candidate to watch is that same key level, the previous day's low and the low made during the Tokyo session. I explained that if we see bearish price action form right around those points, that opens up a chance to set up a short entry.

I've also walked you through several parts of how the price action played out to this point. Last time, right after the broadcast, price formed this small sideways range, then broke out to the upside with this big bullish candle. It printed a bearish reversal candle, so we expected downside follow-through, but it snapped back into the range as a fakeout and continued sideways again.

Here price printed a bullish candle and broke to the upside, but follow-through failed again. That confirmed the failed breakout, and price swung back to retest the range low. You can see price respected the same range width at the lower boundary, and right here it formed a bullish reversal candle.

Then a big bearish candle broke sharply below the range. Looking at the move after the breakout, the downside follow-through was pretty strong, and that's exactly the setup we had going into the broadcast. Since it played out as a range breakout, calling for the downside was a fair read.

On the other hand, let's see how gold actually played out. As a bias-flip point, I mentioned in the community that if price came back to this previous-day low, that would be our signal to switch our directional bias. And sure enough, price broke out to the upside, printed a clean reversal candle, then started raising its lows.

From that reversal candle's low up to the recent high, price rallied about 62 dollars, or 623 pips. Right now the picture has flipped into a downtrend, but for this whole move, the previous day's low is still the key level that sets our bias and our directional read. So given this setup, today's breakdown for community members walks through these three key points, covering both the bullish and the bearish scenario in detail.

On the 1H chart, the trend has flipped into a downtrend, so my base bias here is clearly bearish. After the reversal down, price looks set to test the lows, and my key focus right now is this wedge formation here. If price instead breaks above the Tokyo session high, I'd flip my bias and start hunting for long entries rather than shorts.

So let's turn our attention back to the live chart once more here. Since the London session open I shared early with our community, price is still printing red candles and cutting the lows lower. Watch closely whether this big bearish candle turns out to be the climax move here, since that's a key level to keep an eye on. I really want to watch how this next 1H candle closes and confirms. That wraps up today's gold analysis.