Gold (XAUUSD) Daily Analysis: Bearish Triangle Pattern Points to Final Wave Decline

Gold remains under selling pressure on the daily timeframe after breaking below a key support area and continuing to trade within a broader corrective structure. The current price action suggests that the market may be developing the final stages of a bearish Elliott Wave sequence, with another decline expected before a larger correction or reversal can emerge.

Descending Triangle Signals Weakness

The chart shows a descending triangle formation, a pattern often associated with bearish continuation. Price has repeatedly failed to break above the descending trendline, indicating that sellers continue to dominate the market.

The recent breakdown below the triangle support strengthens the bearish outlook and suggests that downside momentum remains intact.

As long as price remains below the broken support zone and descending resistance line, the path of least resistance remains to the downside.

Elliott Wave Structure Suggests More Downside

From an Elliott Wave perspective, Gold appears to be forming a five-wave bearish sequence within a larger corrective pattern.

• Wave (i) initiated the first leg lower.
• Wave (ii) completed a corrective rebound.
• Wave (iii) produced a strong impulsive decline.
• Wave (iv) is expected to develop as a temporary corrective rally.
• Wave (v) may complete the overall bearish structure before the correction ends.

The projected wave count suggests that the current decline has not yet reached its final target.

Swap Zone Becomes Key Resistance

The highlighted swap zone now represents a major resistance area.

This zone previously acted as support before being broken by bearish price action. A retest of this area could attract fresh selling interest and provide confirmation that the downtrend remains active.

Any rally toward the swap zone should be monitored closely for potential bearish rejection signals.

Triangle Target and Fibonacci Confluence

The projected target area aligns with both the completion of the triangle pattern and the Fibonacci 161.8 extension zone.

This confluence creates a high-probability area where the final wave (v) may terminate. If price reaches this region, traders should monitor momentum for signs of exhaustion or bullish divergence.

The target zone may serve as a potential area for profit-taking by sellers and the beginning of a larger corrective recovery.

Momentum Analysis

The momentum indicator continues to print negative readings, reflecting ongoing bearish pressure.

Although momentum has weakened from its previous extreme levels, there is currently no confirmed bullish divergence. This suggests that sellers may still have enough strength to push prices lower before a meaningful reversal develops.

Continued weakness in momentum supports the expectation of another bearish leg.

Price Outlook

The preferred scenario remains bearish while price trades below the descending resistance line and swap zone.

A temporary recovery toward wave (iv) may occur in the short term. However, unless buyers regain control above key resistance levels, Gold is expected to continue lower toward the projected target zone, completing the five-wave decline.

Conclusion

Gold remains technically bearish on the daily timeframe. The combination of a descending triangle breakdown, bearish Elliott Wave structure, and negative momentum continues to support the downside scenario.

Traders should monitor the swap zone for signs of rejection and watch the projected target area closely, as it may mark the completion of the current bearish cycle and provide clues about the next major market move.