Beyond the Candles: Reading Market Structure with Volume Profile
Title: Order Flow Decoded: Why Gold's Pullback Isn't Necessarily Bearish
After a strong rally, gold is seeing some rotation. Amateurs see a pullback and think "sell." Professionals look under the hood at market structure and order flow to distinguish between a healthy retest and a true reversal.
The Professional Framework: Value Area (VA)
Advanced analysis uses the Volume Profile to identify a "Value Area"—the price range where ~70% of trading occurred. This tells us where the market found fair value.
· Value Area High (VAH): ~4,385 - The top of that accepted range.
· Value Area Low (VAL): Provided support for the recent bounce.
What Happened & What's Next:
1. Rally: Price rallied from the VAL, reclaimed the VAH, and pushed to a key reaction zone near 4,450-4,454
2. Reaction: The 4,450-4,454 zone acted as a magnet, where natural profit-taking from the earlier rally occurred. Order flow data showed a "wall" of sell orders here.
3. Critical Scenario: The current pullback is a test. If price retraces and finds buyer support at or above the VAH (~4,385), it would signal that the market "accepts" value at higher prices, making it a constructive setup for continuation.
📌 Trading Insight:
· Bullish Scenario: A defended hold above ~4,385 (VAH) opens a path toward 4,473 and then 4,489.
· Invalidation Level: A break and failure to reclaim the VAH (~4,385) weakens the immediate bullish structure.
Key Levels to Watch:
· Support (Buyer Zone): 4,385 - 4,400 (VAH & prior highs)
· Resistance (Profit Zone): 4,450 - 4,454
· Next Target: 4,473 - 4,489
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