Impact of yesterday’s Piercing Bar (Gold/USD 1D Chart)

Impact of yesterday’s Piercing Bar (Gold/USD 1D Chart)

1. Price Action & Candlestick Pattern Analysis
• The Piercing Line pattern on the daily chart is typically a bullish reversal signal, appearing after a downtrend.
• However, today’s strong bearish follow-through (big red candle) invalidates the bullish intent of the pattern. This signals weakness in buyers’ strength.

2. Volume Spread Analysis (VSA) & Market Sentiment
• Volume change is negative (-5.8%) with an increase in spread (74.95%), which means there’s a wider price range with less participation—suggesting weakness in demand.
• Weak buying pressure across lower timeframes (1H, 4H, 8H) confirms that any bounce is likely to be short-lived.

3. Support & Resistance Zones
• Key resistance at 2,956-2,972 (VWAP Upper Band & Liquidity High) acted as a rejection zone.
• Key support at 2,888-2,891 (VWAP & VSA Liquidity Low). This is the level to watch for potential breakdown.

4. Momentum & Trend Analysis
• The bearish momentum is strong across multiple timeframes (1H, 4H, 8H).
• Price failed to hold above 2,932 VWAP, confirming further downside risk.

5. Order Flow & Market Strength
• Negative Delta on footprint charts shows that sellers are dominating order flow.
• Absorption at 2,899-2,900 suggests smart money is still distributing, not accumulating.

Outlook & Trading Plan

Bias: Bearish Outlook (Short Continuation Expected)
• Entry: Sell Below 2,891 (Breakdown confirmation)
• Stop Loss: 2,920 (Above rejection zone)
• Take Profit 1: 2,863 (Liquidity Low)
• Take Profit 2: 2,850-2,810 (VWAP Lower Band zones)
• Confidence Level: 75%

Justification for Trade:
• The Piercing Line failed to reverse trend.
• VWAP breakdown & weak volume structure confirm bearish continuation.
• Momentum remains bearish, with weak demand signals.

👉 Conclusion: Gold remains bearish unless bulls reclaim 2,932-2,956. Short positions favored on breakdown.