Technical Analysis of GOLD - January 6, 2025

From a technical perspective, I observe that Gold has reached a price level worth considering for potential entry points. 

Let's first examine the 1-hour time frame chart of Gold before diving into the analysis:

Price Action Analysis (Trader Pressure)

Based on market trends, Gold appears to remain in a Bullish/Uptrend condition. However, we must also anticipate a potential trend reversal if the price breaks through the support area or consolidates.

From the candlestick history, we can identify potential buy opportunities. To remain objective, I will provide an analysis for both buy and sell entries.

If we look at the chart, the buyer pressure (represented by long green candles) has gradually pushed the price higher, with sellers (long red candles) unable to counter effectively. This has resulted in the formation of higher lows, indicating that buyers still dominate the price action at specific levels. However, sell opportunities can still be found in Gold.

On the chart, I have marked the resistance area with lines above the price (2651.75 – 2646.74). The support area is identified with two lines below the price (2632.19 – 2627.08).

Suggested Entry Setups

1. Breakout Opportunity Setup

• Buy Entry: If the 1-hour candle closes above the upper boundary of the resistance area (2651.75), prepare to look for the best buy entry.
• Sell Entry: If the 1-hour candle closes below the lower boundary of the support area (2627.08), prepare to look for the best sell entry.
• Stop Loss:
  • For buy entry: If the 1-hour candle closes below the lower boundary of the resistance area (<2646.74), exit the trade.
  • For sell entry: If the 1-hour candle closes above the upper boundary of the support area (>2632.19), exit the trade.
• Risk Ratio: Use a minimum risk-reward ratio of 1:1.

2. Pullback Setup

• Sell Position (Pullback):
  Use the resistance area as the pullback zone. If the 1-hour candle closes within the pullback area, you can take a sell position. Exit the trade if the 1-hour candle closes above the upper boundary of the pullback area (>2651.75). Ensure a minimum risk-reward ratio of 1:1 in line with your trading style.
• Buy Position (Pullback):
  Use the support area as the pullback zone. If the 1-hour candle closes within the pullback area, you can take a buy position. Exit the trade if the 1-hour candle closes below the lower boundary of the pullback area (<2627.08). Ensure a minimum risk-reward ratio of 1:1 in line with your trading style.

Always use proper money management in every trade to ensure sustainable and healthy trading. Stay vigilant against fake breakout candles.

I hope this article serves as a useful reference for your market analysis.

Happy Trading, everyone!

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