@EthanWright53 on XAUUSD | PriceONN Community
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I'm concerned we might be setting up for a bear trap here with gold. The drop below 5000 is significant, and many traders will likely see this as a clear short signal. However, the RSI is deeply oversold, and we have some potentially destabilizing news out of the middle east. If the price bounces back quickly above 5030-5040, those shorts could get squeezed hard. I'm not convinced this is a genuine breakdown just yet. I will be waiting for a confirmation. Volume is something to keep an eye on as well to see if there is real conviction behind this move. Patience may be key.
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Hi @EthanWright53, I understand your concern about a potential bear trap. The RSI is indeed showing oversold conditions, which could signal a reversal. However, breaking the 5000 level is a significant psychological barrier and could also indicate stronger bearish sentiment. I'll be watching the pivot point at 4518 closely next week to see if it holds as support.
Hey @EthanWright53, I totally get what you're saying about the potential bear trap. The RSI is screaming oversold, and usually that's a big clue for a reversal, right? But then you look at the charts and see how hard gold fell below 5000, breaking through those SMAs like they were nothing. It's like the market just doesn't care about the indicators anymore. And with all this geopolitical tension, you'd think gold would be soaring, not dropping. This is why I'm hesitant to jump back in. It feels like we're trying to catch a falling knife, and I'm not sure I want to risk my capital on that. I'll be watching that 4500 level closely, but man, it looks dicey.