Technical analysis by ForexKid101 about Symbol PAXG: Buy recommendation (5/18/2025)

OVERVIEW: We are seeing signs of a potential trend reversal or major correction on Gold, with clear structure shifts and bullish momentum building up after a deep corrective move inside a larger descending channel. This plan is built around an entry from a key demand zone formed after a break of structure (BOS) and mitigation of Fair Value Gaps (FVGs) across multiple timeframes. 1. Market Story (Structure Summary) Gold has been moving inside a downward sloping channel, defined by lower highs and lower lows: Trend Element Price Level Reason 1st High (ATH) 2nd High Lower Highs Lower Lows 3500.20 3431.25 Start of macro descending trendline 2nd touch, validating resistance 3412.02 → 3345.70 → 3240.13 Confirmed downtrend structure 3269.31 → 3201.43 → 3119.24 Bearish structure continuation From this point, price found demand at 3119.24 and aggressively broke: • Internal descending trendline (showing loss of bearish control) • Previous structural resistance at 3191.00 (now support) • Multiple Structure Shifts (SS) and a BOS, signaling a bullish transition Summary: The downtrend structure is weakening. Price is breaking internal resistances and making higher highs/lows. 2. Current Market Context – 30M Chart Breakdown From your chart: • After bottoming at 3119.24, price broke short-term structure (SS) → rallied → pulled back to mitigate FVG at 3160–3175 zone. • This mitigation created a strong Point of Interest (POI), aligned across 1H, 30M, 15M, 5M FVGs. • The current retracement into that POI is setting up a bullish continuation. Fair Value Gaps (FVGs) represent inefficient price movement (imbalances) that are often filled before continuation. Once filled, they act as demand or supply. 3. Key Technical Zones & Why They Matter Zone/Level Type Why It Matters 3500.20 ATH Long-term TP zone. Start of entire downtrend 3431.25 Macro Resistance 2nd touch of descending trendline 3343.05 Previous High TP1 level. Strong reaction expected 3240.13 – 3260 Add Position Zone Previous internal resistance broken. Confirmed demand after breakout 3175 – 3160 POI / Entry Zone MTF FVG + demand + origin of last strong bullish leg 3119.24 SL Invalidation Zone Last lowest low. Break below here invalidates the setup 4. Execution Plan – How to Trade This Setup Primary Entry (Buy Limit or LTF Confirmation): • Entry Zone: 3175 – 3160 (POI) • Confirmation Entry: Look for bullish price action on 5M–15M: o Bullish engulfing candle o Internal BOS on LTF o Rejection wick from POI • SL Options: o Conservative: Below 3119.24 (hard invalidation) o Aggressive: Below 3149.50, just under the POI Scale-In/Add Zone: • Price: 3240.13 – 3260 • Condition: Wait for a clean break and retest • Why? This zone acted as strong resistance in the past and will confirm buyer strength once retested successfully. 5. Target Levels (Profit-Taking Zones) Target Level Reason TP1 3343.05 First structure high TP2 3431.25 Second macro trendline touch TP3 (Final) 3500.20 ATH, end of descending channel 6. Risk-Reward Management Strategy Entry SL Target Conservative e RRR (TP1–TP3) 3165 3119.24 3343.05+ 3:1 to 6:1 Aggressive 3165 3149.50 3343.05+ 4:1 to 8:1 Only risk capital you're willing to lose If POI fails and price breaks 3119.24 → invalidate the long bias 7. Confluences – Why This Trade Is Strong • Multiple Structure Shifts (SS) confirmed bullish reversal • Break of Structure (BOS) shows change in momentum • FVG mitigation = smart money entry zone • Internal trendline was broken = bearish structure failing • Demand aligned across 4 timeframes (1H → 5M) • Clean RRR for both conservative and aggressive styles