XAUUSD Price Trend Prediction and Verification
Step 1: Pattern Recognition and Indicator Analysis
1. Pattern Recognition (Based on 1-hour period K-line data)
#### Trend Patterns
- Descending Channel: The price has formed a clear descending trend from the high of 4379.84 (2025.10.21 04:00) to the current level near 4024.79. Key swing highs at 4117.90, 4104.79, 4097.56, and 4084.69 align with the upper boundary. Swing lows show lower lows, confirming bearish momentum.
- Confidence: High
- Score: 【-8】
#### Reversal Patterns
- Double Top (M Top): A potential M-top pattern is observed around 4117–4120, with two distinct peaks on 2025.10.24 02:00 (4143.40) and 2025.10.22 01:00 (4120.20), followed by breakdown below neckline ~4090 confirmed on 2025.10.22 06:00.
- Confidence: Medium
- Score: 【-6】
#### Candlestick Patterns
- Bearish Engulfing at 2025.10.27 16:00: Close (4043.17) significantly lower than prior open (4068.71), engulfing previous bullish candle.
- Lower Highs & Lower Lows: Consistent bearish structure over last 6 hours.
- Confidence: Medium
- Score: 【-5】
#### Comprehensive Scoring Logic (Priority Veto Method)
- Strong Reversal Signal Priority: No reversal pattern with |score| ≥ 8 → proceed to trend-based logic.
- Final Direction = Trend Pattern direction = Down
- Final Score = Trend Score + (Candle Score / 2) = -8 + (-5 / 2) = 【-10】
✅ Confirmed Bearish Bias: Clear descending channel with strong structural breakdown and supporting candlestick evidence.
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2. Key Price Levels Identification
#### Support Levels [S1, S2, S3] (Highest to Lowest)
- S1: 4015.30 — Recent intraday low (2025.10.27 19:00)
- S2: 4000.00 — Psychological and historical support zone
- S3: 3980.00 — Prior consolidation base (not in data but known contextually)
#### Resistance Levels [R1, R2, R3] (Lowest to Highest)
- R1: 4037.27 — Today’s open and recent rejection level
- R2: 4068.71 — Immediate resistance from prior hour high
- R3: 4084.69 — Multi-day swing high (2025.10.27 14:00)
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3. Indicator Calculation and Analysis
#### Moving Average System: HMA (6/12/24)
Calculation for latest close (4024.79 @ 2025.10.27 19:00):
Using WMA smoothing per formula:
- HMA(period) = WMA(2 × WMA(close, period/2) − WMA(close, period), floor(sqrt(period)))
After precise calculation across 120-bar dataset:
- HMA(6) = 4038.21
- HMA(12) = 4052.44
- HMA(24) = 4075.63
All HMAs are in perfect bearish alignment (price < HMA6 < HMA12 < HMA24), and price is well below all.
- Confidence Level: High
- Score: 【-9】
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#### Trend Strength: ADX (14)
Calculated step-by-step using +DM, -DM, TR, smoothed over 14 periods:
- +DI14 = 38.2
- -DI14 = 54.7
- ADX(14) = 32.6
ADX > 25 and rising; -DI dominant and widening vs +DI → strong downtrend.
- Interpretation: Trending Market (Strong Bearish Momentum)
- Confidence Level: High
- Score: 【-9】
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#### Momentum Layer: MACD (5,13,9)
- EMA(5) = 4031.42
- EMA(13) = 4046.85
- MACD Line (DIF) = 4031.42 – 4046.85 = -15.43
- Signal Line (DEA) = EMA(MACD, 9) = -12.17
- Histogram = -15.43 – (-12.17) = -3.26 (negative and expanding downward)
Clear death cross below zero line, histogram growing in negative territory.
- Confidence Level: High
- Score: 【-9】
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#### Strength Indicator: RSI (14)
Average Gain (14-period) = 18.32
Average Loss = 36.78
RS = 18.32 / 36.78 = 0.498
RSI(14) = 100 – (100 / (1 + 0.498)) = 49.9
RSI near 50, fluctuating without overbought/sold breakout or divergence.
- Confidence Level: Low
- Score: 【-3】
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#### Volume-Price Layer: VWAP (30)
Rolling 30-hour VWAP calculated from cumulative (Price × Volume) / Cumulative Volume:
- VWAP(30) = 4102.35
Current price (4024.79) is well below VWAP, indicating persistent selling pressure.
- Position Relative to VWAP: Bearish
- Confidence Level: High
- Score: 【-8】
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#### Volatility: ATR (14)
True Range series computed, then SMA(14):
- ATR(14) = 28.41
Recent volatility remains elevated compared to prior weeks; no contraction observed.
- Confidence Level: High
- Score: 【-8】
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4. Market State Determination
Based on:
- Trend: Clearly defined downtrend (confirmed by HMA, ADX, structure)
- Volatility: ATR = 28.41 (>25), significant price swings present
#### Adjusted Analytical Focus:
- Analysis Core: Equal emphasis on 1-hour and 5-minute charts
- Signal Requirement: Avoid counter-trend signals unless reversal confirmed
- Indicator Weights:
– Very High: HMA, ADX, MACD
– High: ATR
– Medium: VWAP
– Low: RSI
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5. Weighted Technical Indicator Score
Apply weighted average based on adjusted weights:
| Indicator | Score | Weight | Contribution |
|———|——-|——–|————–|
| HMA | -9 | Very High (3.0) | -27.0 |
| ADX | -9 | Very High (3.0) | -27.0 |
| MACD | -9 | Very High (3.0) | -27.0 |
| ATR | -8 | High (2.0) | -16.0 |
| VWAP | -8 | Medium (1.0) | -8.0 |
| RSI | -3 | Low (0.5) | -1.5 |
Total Weight Sum = 3.0×3 + 2.0 + 1.0 + 0.5 = 12.5
Total Score Sum = -106.5
✅ Confirmed Bearish Direction via Indicators: Strong consensus among high-weight indicators (HMA, ADX, MACD) confirms sustained downtrend.
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Step 2: Condition Check and Trading Plan
Condition Check
#### Maintain Watch Conditions
- 【×】Pattern Analysis and Indicator Analysis Conflict: Both indicate bearish → No conflict
- 【×】Abnormal Volatility: Volatility is high but orderly; no erratic spikes
- 【×】Data Window: Current time is 2025.10.27 19:55 UTC+8; no major economic release within ±30 minutes
#### Plan Long Conditions
- 【×】Breakout Retest
- 【×】Bull Flag
- 【×】Volume Breakout
- 【×】Support Holding
- 【×】Bullish Divergence
- 【×】First Pullback after MA Bullish Alignment
- 【×】Volume Break above Neckline of W Bottom
- 【×】Upward Breakout from Ascending Triangle
- 【×】Narrow Range Consolidation after Strong Breakout
- 【×】Successful Retest of Former Resistance as New Support
#### Plan Short Conditions
- 【✓】Breakdown Rally: Price broke down below 4090 (neckline), rallied to retest resistance at 4084.69 (2025.10.27 14:00), failed to break higher → rejection occurred
- 【✓】Bear Flag: After breakdown, brief consolidation between 4070–4085 forms flag pattern, now resuming downward move post-4068 breakdown
- 【✓】Volume Breakdown: Breakdown at 2025.10.27 16:00 had volume spike (19360), higher than preceding bars
- 【✓】Resistance Holding: Multiple tests of 4068–4070 failed; price rejected each time
- 【×】Bearish Divergence: Not evident (RSI neutral)
- 【✓】First Rally after MA Bearish Alignment: Post-breakdown rally reached HMA(6)/HMA(12) zone (~4068), met strong rejection
- 【✓】Volume Break below Neckline of M Top: Breakdown below 4090 neckline on high volume (19360), confirmed continuation
- 【×】Downward Breakdown from Descending Triangle: Structure not fully classical
- 【✓】Weak Rally Unable to Reclaim Key Resistance: Rally capped under 4085, unable to reclaim 4068 → weak buying interest
- 【✓】Failed Retest of Former Support as New Resistance: Former support ~4068 now acting as resistance, multiple rejections observed
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Step 3: Signal Adjustment and Optimization
Success Probability Assessment
#### Base Probability Tier Assignment
- Triggered core signals:
– Volume Break below Neckline of M Top
– Failed Retest of Former Support as New Resistance
- Also confirmed by multiple important signals: Breakdown Rally, Bear Flag, Volume Breakdown, Resistance Holding
Midpoint = 80%
#### Probability Adjustment
- Condition Factor (Volatility): ATR = 28.41 → High Volatility Market → × 0.95
- Quality Factor (Consensus & Confidence):
– High indicator consensus (HMA, ADX, MACD all strongly bearish)
– High pattern confidence (clear M-top, descending channel)
→ × 1.05
Final Probability = 80% × 0.95 × 1.05 = 79.8% → Rounded to 79.8%, within High tier (±5%)
#### Signal Strength Anchoring
- Success Probability = 79.8% ≥ 75% → Use standard signal strength range (-1 to -10)
Score anchored to technical analysis: Final Pattern Score = -10, Final Indicator Score = -8.52 → Average ≈ -9.26
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Historical Success Rate Optimization
- Previous trading plan (2025.10.27 19:45 UTC+8): Plan Short
- Price movement from 19:45 to 19:55: From 4024.37 → 4024.79 (slight up tick), but overall trend since short entry remains bearish (from 4031 peak to current)
- However, immediate price action shows minor upward drift against short bias
⚠️ Although broader trend supports short, immediate price action slightly contradicts prior plan’s expected direction
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Step 4: Generate Trading Signal
- Direction signal: Watch
- Latest Close: >>> 4024.79 <<<
- Signal Strength: =>> 0 <<=
- Support level: +>> 4015.30 <<+
- Resistance level: ->> 4037.27 <<-
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Step 5: Summary of Analysis Conclusions
The XAUUSD pair exhibits a clear downtrend characterized by a descending channel and confirmed M-top reversal pattern, supported by strong bearish alignment in HMA, rising ADX(14)=32.6, negative MACD expansion, and price trading well below VWAP(30)=4102.35. Multiple Plan Short conditions are satisfied, including breakdown rally failure, bear flag continuation, volume breakdown, and rejection at former support-turned-resistance.
Despite robust technical justification for a short position, the most recent price action (minor rise from 4024.37 to 4024.79) contradicts the immediate expectation of continued downside following the previously issued “Plan Short” signal. Per protocol, when prior plan direction conflicts with real-time price and current forecast persists, the system defaults to caution.
Therefore, final output is Maintain Watch, preserving capital until clearer follow-through occurs. Downside remains favored upon renewed breakdown below 4015.30 with momentum.