I'm currently observing a distribution phase in XAUUSD, where a trading schematic appears to be unfolding based on available data. We have completed phases A (BC, AR, ST).
Phase B formed a significant area of supply (SOW) within wave 4 of the internal cycle, supported by clean price action, thereby adding confluence to harmonic patterns.
Phase C (LPS) tested the UT zone from Phase B (resistance or demand) and elicited a reaction, suggesting readiness for a corrective downward movement in gold prices. I anticipate a markdown for leg 3.
From a cyclical perspective, we've seen a reaction near the monthly standard deviation of wave 5 leg, indicating a potential reversal. Concurrently, the standard deviation was impacted by UT during Phase B of the distribution schematic, reinforcing the harmonic pattern.
I've set a validation point with a hard stop loss at risk-off LPs in Phase D.
Target-wise, I'm aiming to exploit liquidity on the sell side EQL, directly linked with leg 4 of the internal cycle, presenting a straightforward risk-off opportunity
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