Gold prices are approaching a significant resistance area aligned with the 0.5 Fibonacci retracement level, where multiple rejections have increased the likelihood of a technical pullback before the next directional move, according to an analysis from Investing.com.
On the daily timeframe, the broader market structure remains bearish, but the internal structure has shifted bullish following the break of the previous internal high, supporting recent upside momentum. The analysis notes that a pullback would be considered a normal technical correction as long as the broader bullish internal structure holds. The first reaction zone of interest is the Weekly Fair Value Gap, which could act as a potential support area. If buyers defend this level, the bullish continuation scenario remains valid.
If the pullback extends deeper, attention turns to the fresh Daily Fair Value Gap located in the discount area, which also aligns with a former resistance zone that could serve as support. A strong reaction from this area may provide a more favorable entry point for the continuation of the broader bullish move.
On the 4-hour timeframe, the internal structure has turned bearish following a breakdown of the previous internal low, confirming a Market Structure Shift. The subsequent move higher is viewed as a technical pullback into a premium area, where price has already shown rejection. The key level to monitor is the current protected low. A decisive candle close below this level would strengthen the bearish scenario and potentially drive the daily pullback deeper toward the discount area.
Conversely, if the protected low holds and price reclaims and breaks the previous 4-hour high, the bearish scenario would be invalidated, increasing the probability of bullish continuation on the daily timeframe. The analysis emphasizes that the depth of the pullback will depend on how price reacts around these structural levels rather than anticipating the exact direction.
