XAUUSD Chart 4H Analysis – May 18, 2025
The provided XAUUSD Chart (Gold Spot/U.S. Dollar) 4-hour chart outlines a structured technical setup with clearly defined entry points, retracement zone, and multiple take-profit (TP) targets.
The current price at the time of analysis is $3,198.67, with the potential for a bullish continuation upon confirmation within the valid setup zone. Let’s break this down in detail:
Current Price and Entry Strategy
- Current Price: $3,198.67
- Recommendation: Look for better entry around or near the green support zone. The setup is bullish-biased, suggesting a buy-on-dip opportunity.
- Support/Invalidation Zone: If the price closes below the green zone, the setup will be invalidated. Hence, risk management and confirmation are crucial before taking any position.
Target Levels Identified
Three Take-Profit (TP) levels are established in the chart, each indicating potential upward momentum if the price respects the support and begins to rise again:
- TP1: $3,220.67
✔️ Gain of 22 USD (220 pips) from current price
✔️ Represents an initial move post-entry confirmation
✔️ Ideal for short-term scalpers or conservative traders - TP2: $3,252.67
✔️ Gain of 54 USD (540 pips) from current price
✔️ Mid-level target indicating strong bullish continuation
✔️ Can be a good point for partial profit booking - TP3: $3,284.67
✔️ Gain of 86 USD (860 pips) from current price
✔️ Long-term or full swing trade target
✔️ Represents full bullish momentum with higher reward-to-risk ratio
Retracement Zone Analysis
The green zone acts as a retracement area and a decision point. Here’s how it plays out:
- Retracement Buy Opportunity:
If the price retraces toward the green support zone without closing below it, it presents a buying opportunity. The green zone suggests a strong support area, and bulls may step in here. - Invalidation Risk:
If price action closes below the green zone, then the bullish setup is invalid, and any long trades should be avoided or closed. - Stop-Loss Placement:
Suggested stop-loss is $5 below entry (i.e., 50 pips or $10 maximum risk). This keeps the risk limited and helps maintain proper risk-reward management.
Trade Management Strategy
- Wait for Confirmation:
Don’t enter blindly. Wait for bullish candle formations near the green zone or key support levels. Watch for wicks, engulfing candles, or bullish pin bars for confirmation. - Risk-Reward Balance:
Maintain a minimum of 1:2 or 1:3 RR ratio. For TP3, the RR could be very favorable if entered near the retracement zone. - Trailing Stop Strategy:
Consider adjusting your stop-loss as price moves in your favor, especially after TP1 or TP2 are reached. This can lock in profits while allowing for extended moves. - Volume Check:
Ideally, a bounce from the green zone with rising volume adds conviction to the trade setup.
Key Chart Insights
- Timeframe: 4-hour chart – suitable for intraday or short swing trades.
- Trend Bias: Bullish unless invalidated by a close below the green zone.
- Structure: Clean step-by-step levels for risk-managed trading.
- Use Case: Ideal for traders looking for structured entry and exit points in trending gold markets.
Trading Disclaimer:
This analysis is for educational and informational purposes only and should not be considered as financial advice or a solicitation to buy or sell any financial instruments. Trading forex, commodities, or CFDs involves significant risk and is not suitable for every investor. Past performance is not indicative of future results. Please consult with a qualified financial advisor and ensure you understand the risks before engaging in any trading activity. The views expressed in this analysis reflect personal opinions and are not guaranteed to produce any specific results. Always trade responsibly and use proper risk management.