Gold at 4,134 or 4,055 first? Today's two scenarios | XAUUSD Nov 9

Hi everyone, I'm Daniel, an active prop trader. For today's gold, my short-term bias is bearish, but the bigger picture overall is still bullish. Since our last analysis, just as our scenario expected, price went back to test the origin of the channel, rallying a full 104 dollars, or 1043 pips.

Right now, price has just tested an upside breakout of the bear channel, and this is the first breakout attempt, and also the first upswing leading into the breakout. That rally was very steep, so I told our Trading Lab members ahead of time to expect a deep retracement, and sure enough, that's exactly what we're seeing, with price falling right now. So from here, will the decline keep going, or will price bounce off a key level and resume its rally?

That's exactly what I focused on in today's analysis. Well then, let's jump right in and take a detailed look at the daily chart for gold first. So, looking at last week's final daily candle, gold closed as a bearish doji, basically a red indecision candle.

Originally, I'd mentioned that if the daily candle closed bearish with a long lower wick, gold would most likely form a sideways trading range afterward, and that once that range formed, the eventual move would most likely be an upside breakout above that range, And sure enough, the daily candle actually formed a bearish doji with a long lower wick, so right now I think an upside breakout from this sideways trading range is more likely. As for trade setups on the daily chart, price is still forming a sideways trading range.

So, as I always say, until we actually confirm a breakout on the daily chart, we really can't consider any daily-level entries yet. So for short-term trades, we're now at the stage where these candles 48 and 49, with their long wicks, can actually be used as solid reference points for our trading decisions. First, let's look at the high of candle 48.

I'd say this is the candle that defines the upper limit of our sideways range here. On the other hand, the low of candle 49 is highly likely to act as the lower limit of the sideways range that forms after this. You can use these levels as decision criteria for short-term trades, but whether you actually wait for price to reach this rate is a completely separate question, because volatility often contracts as the breakout timing approaches.

So that's why I think you basically need to judge the recent volatility from the 1H chart, and then adjust the timing of your entries based on how price is actually moving there. Alright, that's it for the daily chart, so now let's look at the 1H chart. On the 1H chart, this red line marks where the 1H chart stood when we did our last exclusive stream for Trading Lab members.

Here on YouTube, I'll narrow it down to the key points of the technical analysis and scenarios I walked through at that time, and explain them now. The first point I shared was that price had overshot the bearish channel. At that time, I believe the channel's lower boundary was roughly around here, and price overshot it before starting to reverse back to the upside.

So my short-term bias was bullish. Price broke out above the Tokyo session's candles, and the candle closed as a full-bodied bullish marubozu with no wicks. Based on that, my scenario was a rally that could, at most, go back up to test the starting point of this channel.

That's what I explained. I also covered my criteria for switching bias. If price broke that day's Tokyo session low to the downside, or if a clear bearish reversal candle formed, then, given the situation on the daily chart, I'd want to quickly flip my view to bearish.

So I laid out exactly when I'd drop the bullish view and change my outlook. What I especially wanted to flag was this London session candle, a full-bodied bullish marubozu. If price action were to completely negate that big bullish candle, I explained that we'd need to reassess the uptrend that started right from the London session open.

I also walked through the price action and the whole process that led us to this point. First, I was explaining the price action from around this area. With the first candle of the London session open, this bearish doji closed, and that confirmed something important.

The recent bullish reversal bar, which had formed a higher low against that big bearish candle, then saw its upside follow-through fail completely. After that, even a single doji counts as a range, and the candles overlapped one another, building a trading range. But look at the sequence of price action into the later bars.

Please check the 5-minute chart, because on the 5-minute chart, this was forming a bear flag. So I think the breakout direction was relatively easy to read here. In the London trading session, on bar 5, price attempted a breakout to the upside, but ultimately the move didn't hold, and bar 6 clearly confirmed that the breakout had failed.

Then, once price broke out to the downside of that bear flag, a short entry became a realistic option, with the stop loss order placed just above the high of bar 6. Then in the New York session, bar 3 had already reached the measured move target based on the height of the trading range, and which range do I mean exactly? Well, It reversed here and then formed a trading range, so it's the width of this range.

This roughly overlaps with the measured move that was reached at bar 3, so I think the target was fairly easy to read in this kind of price action on the chart. Then in the New York session, bar 3 attempted a bullish reversal, but the next bars failed to follow through to the upside. Bars 7 and 8 then formed a breakout pullback into the trading range.

This level had been the lower edge of the trading range, so once the breakout pullback was confirmed, it became another short entry point, and price formed a downswing. Then price broke out to the upside of the doji, that doji on bar 6, and right as the follow-through was confirmed, that's exactly where things stood at the time of the live stream. So let's check how the scenario played out.

At first, price moved as if to negate bar 2 here, but with the follow-through doji it made a weak bullish reversal and formed the low again, leading into a double bottom. And right in line with the scenario, price rallied as if to test the origin of the channel, climbing about 104 dollars, or roughly 1043 pips, which we can confirm here. So once again, it played out mostly according to our scenario.

So today, in the community-exclusive stream, I'm covering the upcoming scenario and technical analysis through these three key points. Point one: it tested a rising channel breakout, but short term we're bearish. On that point, we've already confirmed the downside follow-through.

Note the deep correction after the surge and the bounce at a recent key level. If the uptrend resumes after this reversal, we're expecting a further break to new highs, and in Trading Lab I explained it all in detail, including how to calculate the target high. Right now, things are playing out exactly as our scenario predicted.

We've seen this powerful rally here, followed by a very deep retracement, all confirmed. That's all for today's gold update.