XAU/USD - SHORT set-up Explained Using Chart Patterns

In this technical analysis I will break down the major things happening to GOLD at the moment.

After hitting a recent all time high gold has been dropping ever since. First we found a very strong rejection and later a more sustainable and clear downtrend.

There are currently two main technicals that I want to emphasize for this next trade. First of all we can see a descending parallel channel. This channel shows the slow average bearish sentiment that gold is enduring. This gives me a bearish bias on my next trades as well.

Since we are seeing that the price is relatively high in this descending channel we can get a short trade in with a very good risk reward. The reward would travel all the way to the bottom and the risk would be a stop loss on a breakout of the top.

Another symbol that is bearish is the head and shoulders that is most clearly seen on the 1H. In this 4H chart you can still see it relatively clearly. This is a bearish chart pattern.

Together I believe these suggest a short trade set-up. All other info can be found on the chart.

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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!