Bearish day, but watch the rebound — what confirms more downside | XAUUSD Oct 28

Hi, I'm Daniel, a full-time active prop trader. For gold today, my bias right now is bearish. Since the last video, the uptrend played out just as our scenario expected, then price reversed out of the trading range, and from the New York session open it dropped sharply, falling 36 dollars, or 365 pips, exactly as planned.

Right now, since the Tokyo session open, price has been a strong bearish trend day, but the internal structure became a spike and channel trend, so we should at least be wary of a rebound testing the channel's starting point. Would the downtrend continue, or would price reverse from that recent climactic move into a price-based correction? I shared this early with Trading Lab members, and right now, just as planned, at least a price correction is confirmed.

Alright, let's take a closer look at the daily chart first. Since I skipped Wednesday's stream, two daily candles have already closed since then, so let's start by reviewing where things stand. As for the current situation on the daily chart, the long sideways range finally ended, with candle 46 breaking out to the downside.

Candle 46 is a clear bearish trend bar, closing as a big bearish candle. So our bias was bearish, and further downside follow-through was likely. Candle 47 did confirm that follow-through to the downside, forming a bearish doji candle.

However, compared with candle 46, its real body was noticeably smaller, signaling that bearish momentum was stalling. And since it formed a doji candle, a sideways time-based correction was quite likely to follow from there. Candle 48 did in fact turn into a time-based correction.

It formed a bullish doji, showing volatility was contracting, so it closed as a candle suggesting the timing of a breakout was getting close. Then on yesterday's daily candle, an upside breakout actually happened. However, it runs against the original downward direction, so this candle suggests it could easily turn into a fakeout and pull back afterward.

Therefore, we should be ready for this breakout to fail, but if price pulls back down, we can assume bulls have been setting up long positions from candle 48 onward, so it'll trigger their stop loss orders too, making a sharp momentum-driven drop more likely, at least temporarily. On the other hand, if the upside follow-through continues, I think a rising trading range is likely to take shape even on the daily chart level, and ultimately, though, it carries the risk of a sharp sell-off from somewhere around the 4600 high on the daily chart.

So short term, price action is hard to read, always at risk of a sharp drop, But basically, I think the market would be easier to read if price extended further lower. Next, let's go through the price action on the 1-hour chart As I mentioned, I took yesterday off, so my last stream for community members only is this red line part here. That stream went live on the 26th, right as the third 1H candle of the London session closed.

On YouTube, let's look back at which scenarios and technical analysis I was explaining at that point in time, Let's zero in on the key points and keep explaining now. So first, looking at the situation: price broke out to the upside above the doji candlestick that formed during the Tokyo session, and after that, we then got a confirmed breakout pullback, a retest of that broken level, so basically my short-term bias was bullish, and structurally the market is forming a rising trading range, so and also, since the daily chart's bearish bias hadn't broken, I said we should stay alert for a sharp drop here.

As a bullish factor, the London breakout pullback candles were a time-based correction, so In that it rose on a shallow pullback, you can call it a bullish factor, but on the flip side, there are no other bullish factors right now, and the upward momentum on the chart is quite weak, so From here, giving priority to the daily chart's direction, if we confirm a strong-momentum bearish reversal candle or a clear bearish chart pattern, we'd immediately switch to a bearish bias and consider short entries that follow the new downtrend.

That's what I explained. And I also walked through the full sequence of price action on the chart. So where exactly did that whole move start from?

It's right here on the chart, at this point. As for this one, price likewise pushed up and formed a swing high here, and there was a clean sell entry point that started from the outside bar candlestick printed right here, you see, Doji and outside bar candlesticks tend to move in the breakout direction, Also, looking at the big picture, it's a downtrend forming a wedge shape, so I explained that below this low was the perfect chance to enter a short.

Then price broke out to the downside, and once it hit the full measured move, it was actually also an overshoot of the wedge pattern, with a bullish reversal candle, then price formed a small sideways range. Even so, price still failed to fully complete a trend reversal, meaning momentum remains very weak as well Next, since the daily doji formed, the doji made at the Tokyo session open After the candles broke out to the upside, price then formed a pullback, and as of the broadcast, it was testing higher off that breakout pullback.

My scenario was a short-term bullish bias, but I'd also warned you to watch for a sharp drop. And in fact, right after the broadcast, gold played out exactly according to my scenario, a reversal candle formed, then a drop tested the first range by the book, and we've clearly confirmed a sharp plunge of 36 dollars, a full 365 pips. So for today's exclusive Trading Lab content, I'll break it down through these three points.

First, the Tokyo session is in a strong downtrend, so now my bias is bearish. Second, price recently tested the top of the previous day's range, so watch for a reversal move. Third, after the sharp drop, I explained we should watch not only for further downside but also short-term rebound.

Looking at the real-time chart again, price is rebounding sharply right now from the key level I mentioned earlier in Trading Lab. Given the strength of this momentum, the chances of returning to a short-term uptrend from here are now very high. That said, personally, for my trend reference, I'm trading on the 5-minute chart timeframe, so Right around here, the 5-minute chart has already reached a trend reversal. That's all for today's gold analysis.