Gold Forms Bearish Triangle with Double Top XAU/USD Short Setup

🧠 Full Technical Analysis of XAU/USD – Bearish Setup from Triangle + Double Top
🕐 Chart Timeframe: 30-Minutes
💱 Instrument: Gold Spot (XAU/USD)
📆 Date: April 15, 2025
📌 1. Overall Market Context
Gold (XAU/USD) has been exhibiting a rally followed by compression. After forming a local high near 3,230, price started showing signs of indecision and exhaustion in the bullish momentum. This zone has now become a well-established resistance area where price was repeatedly rejected. This sets the stage for a potential bearish reversal.

🔍 2. Key Technical Patterns Identified
🔹 Symmetrical Triangle Formation
A classic symmetrical triangle pattern is forming as price makes lower highs and higher lows, indicating that:

Volatility is decreasing

Indecision is rising

Price is coiling up for a potential breakout

These triangles are typically continuation patterns, but when they form after failed breakouts or reversal patterns (like the double top), they can lead to strong counter-trend moves.

🔹 Double Top Pattern Inside Triangle (Bearish Signal)
Marked as Top 1 and Top 2, a clear double top has formed at the upper edge of the triangle, aligning with the horizontal resistance zone around 3,228–3,230. This is a textbook bearish reversal structure characterized by:

Two price peaks at the same level

Failing to break higher (bull trap)

Suggests selling pressure is overtaking demand

The presence of this pattern within a triangle adds confluence and increases the probability of a downside breakout.

📈 3. Support and Resistance Zones
🔺 Resistance Zone (3,228 – 3,230)
Multiple rejection wicks from this area

Important ceiling for bulls

Bears are clearly defending this level

🔻 Support Zone (3,204 – 3,206)
Price has previously bounced here, showing signs of demand

Also serves as the first major target area if price breaks the triangle to the downside

📉 4. Trading Setup Overview
✅ Entry Criteria:
Look for a confirmed breakout below the triangle support line (~3,215)

Preferably on increased volume or strong bearish candle close

Avoid early entries within triangle; wait for confirmation

❌ Stop Loss (SL):
Placed above the triangle’s upper boundary & resistance zone at 3,240.689

Gives room for noise without invalidating the bearish setup

🎯 Take Profit (TP):
TP1: 3,206.111 – Just above the support line

TP2: 3,205.941 – A round number and psychological level, also aligns with historical price reaction

⚖️ Risk-to-Reward Ratio (R:R):
Approximately 1:2 or higher

Potential for scaling out: partial profits at TP1, rest held for TP2

📊 Trade Psychology & Structure
This setup reflects a market behavior shift from bullish to neutral and now leaning bearish:

The double top signals buyer exhaustion

The triangle consolidation suggests indecision but likely continuation of selling pressure post-failure at resistance

Volume and momentum indicators (not shown here) would add more confirmation—ideal for entry timing

Pro traders often wait for breakouts of such triangles post-confirmation of a reversal structure (in this case, the double top) for high-probability entries.

🧭 Suggested Trading Plan
Action Level Reason
Entry < 3,215 Bearish breakout confirmation
Stop Loss 3,240.689 Above triangle + resistance
TP1 3,206.111 First support zone
TP2 3,205.941 Key psychological level/support