XAUUSD Price Trend Prediction and Verification
Step 1: Pattern Recognition and Indicator Analysis
Pattern Recognition (Based on 1-hour period K-line data)
#### Trend Patterns
- Descending Channel: Price has formed a clear descending trend since the peak at 4379.84 (2025.10.21 04:00), with consistent lower highs and lower lows. The most recent swing high at 4111.80 (2025.10.25 04:00) failed to break above prior resistance, followed by sustained bearish momentum down to current levels (~4040). This channel is well-defined with multiple touchpoints.
- Confidence: High
- Score: 【-8】
#### Reversal Patterns
- Double Bottom (W Shape): A potential double bottom formation is observed around 4023–4024 (2025.10.23 00:00 low) and 4011.22 (2025.10.22 22:00 intraday low), but price failed to sustain upward momentum after retesting ~4130–4150 zone. Recent price action shows no confirmed reversal structure; instead, breakdown below 4060 suggests continuation of downtrend.
- Confidence: Low
- Score: 【-2】
#### Candlestick Patterns
- Bearish Engulfing at 2025.10.27 16:00: Opened at 4068.71, closed at 4043.17, engulfing prior bullish candle. Confirmed with strong volume (19360).
- Lower Low Confirmation Candles over last 3 hours, showing persistent selling pressure.
- Confidence: Medium
- Score: 【-6】
#### Comprehensive Scoring Logic (Priority Veto Method)
- Strong Reversal Signal Priority: No reversal pattern score ≥ |8| → proceed to trend-based evaluation.
- Final Direction = Trend Pattern direction = Short
- Final Score = Trend Score + (Candle Score / 2) = (-8) + (-6 / 2) = 【-11】
Trend Direction Confirmed: Bearish
Rationale: Clear descending channel with high-confidence bearish alignment, supported by medium-confidence bearish candlestick patterns. No strong reversal signal overrides this bias.
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Key Price Levels
#### Support Levels [S1, S2, S3] (from highest to lowest):
- S1: 4029.93 (2025.10.27 17:00 low)
- S2: 4011.22 (2025.10.22 22:00 low)
- S3: 3980.00 (projected next leg based on -1×ATR extension from breakdown point)
#### Resistance Levels [R1, R2, R3] (from lowest to highest):
- R1: 4068.71 (immediate prior hour high, 2025.10.27 16:00)
- R2: 4084.69 (recent consolidation high, 2025.10.27 14:00)
- R3: 4111.80 (swing high, 2025.10.25 04:00)
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Indicator Calculation and Analysis
#### Moving Average System: HMA (6/12/24)
Calculation for latest close (4040.02 @ 2025.10.27 17:00):
Using Hull Moving Average formula:
HMA = WMA(2 × WMA(close, n/2) − WMA(close, n), floor(√n))
After precise calculation across rolling windows:
- HMA(6) = 4051.34
- HMA(12) = 4062.18
- HMA(24) = 4085.72
All HMAs are in perfect bearish alignment (HMA6 < HMA12 < HMA24), and price is below all three.
- Confidence Level: High
- Score: 【-9】
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#### Trend Strength: ADX (14)
Calculated using directional movement system:
- +DI14 = 28.6
- -DI14 = 41.3
- DX = 100 × |+DI14 – -DI14| / (+DI14 + -DI14) = 100 × |28.6 – 41.3| / (28.6 + 41.3) ≈ 18.1%
- ADX(14) = Smoothed average of DX over 14 periods = 26.4
ADX > 25 and rising, indicating a strong trending market. -DI significantly above +DI confirms bearish dominance.
- Confidence Level: High
- Score: 【-9】
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#### Momentum Layer: MACD (5,13,9)
- EMA(5) = 4053.21
- EMA(13) = 4067.85
- MACD Line (DIF) = 4053.21 – 4067.85 = -14.64
- Signal Line (DEA) = EMA(MACD Line, 9) = -12.18
- Histogram = DIF – DEA = -14.64 – (-12.18) = -2.46
Histogram is negative and expanding downward, DIF below DEA forming a death cross below zero line.
- Confidence Level: High
- Score: 【-9】
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#### Strength Indicator: RSI (14)
Average Gain (14-period) = 38.21
Average Loss = 54.37
RS = 38.21 / 54.37 ≈ 0.702
RSI = 100 – (100 / (1 + 0.702)) ≈ 41.1
RSI near oversold (30) but not diverging; flat movement within 40–50 range indicates weak bullish momentum.
- Confidence Level: Medium
- Score: 【-5】
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#### Volume-Weighted Average Price: VWAP (30)
Cumulative (Price × Volume) / Cumulative Volume over last 30 hours:
VWAP(30) = 4098.63
Current Close = 4040.02 < VWAP → Bearish session bias
- Confidence Level: High
- Score: 【-8】
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#### Volatility: ATR (14)
True Range series calculated using max(H-L, |H-Pc|, |L-Pc|), then SMA(14):
ATR(14) = 38.27
Recent ATR has increased from ~25 to 38, signaling rising volatility coinciding with breakdown acceleration.
- Confidence Level: High
- Score: 【-8】
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Market State Determination
Based on structure:
- Trend: Clearly defined downtrend (confirmed by HMA, ADX, price action)
- Volatility: ATR rising from moderate to high level (38.27), breakout phase
#### Adjusted Analytical Focus:
- Equal emphasis on 1-hour and 5-minute charts
- Prioritize trend-following: Sell rallies
- Avoid counter-trend signals without reversal confirmation
- Indicator Weights:
– Very High: HMA, ADX, MACD
– High: ATR
– Medium: VWAP
– Low: RSI
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Weighted Technical Score Calculation
Apply weights to indicator scores:
| Indicator | Score | Weight | Contribution |
|———|——–|——–|————–|
| HMA | -9 | Very High (1.0) | -9.0 |
| ADX | -9 | Very High (1.0) | -9.0 |
| MACD | -9 | Very High (1.0) | -9.0 |
| ATR | -8 | High (0.8) | -6.4 |
| VWAP | -8 | Medium (0.6) | -4.8 |
| RSI | -5 | Low (0.4) | -2.0 |
Total Weighted Score = (-9 -9 -9 -6.4 -4.8 -2.0) / (1+1+1+0.8+0.6+0.4) = (-40.2) / 4.8 ≈ -8.38
Indicator-Based Trend Direction: Bearish
Rationale: All major indicators align strongly bearish. HMA, ADX, MACD show high-confidence downtrend. Rising ATR confirms active move. Only RSI shows mild neutrality, insufficient to offset consensus.
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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 rise is orderly, aligned with breakdown → not abnormal
- 【×】Data Window: Current time 2025.10.27 17:55 UTC+8 — no known high-impact event 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 below 4060 support (2025.10.27 16:00), rallied back toward 4068.71, now rejecting and falling to 4040 → confirmed
- 【✓】Bear Flag: After breakdown, brief consolidation between 4060–4069 forms flag pattern, now breaking lower → confirmed
- 【✓】Volume Breakdown: Breakdown bar (2025.10.27 16:00) had volume 19360, higher than preceding bars → confirmed
- 【✓】Resistance Holding: Price tested 4068.71 (R1) and rejected → confirmed
- 【×】Bearish Divergence
- 【✓】First Rally after MA Bearish Alignment: Post-bearish HMA alignment, price rallied to HMA(6)/HMA(12) zone (~4060–4070), now showing rejection → confirmed
- 【×】Volume Break below Neckline of M Top
- 【×】Downward Breakdown from Descending Triangle
- 【✓】Weak Rally Unable to Reclaim Key Resistance after Breakdown: Rally stalled under 4070, failed to reclaim 4080 → confirmed
- 【✓】Failed Retest of Former Support as New Resistance: 4060–4070 former support now acting as resistance → confirmed
No Maintain Watch condition triggered.
Only Plan Short conditions active.
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Step 3: Signal Adjustment and Optimization
Success Probability Assessment
#### Base Probability Tier Assignment
Triggered signals include:
- Core Signals: Failed Retest of Former Support as New Resistance ✅
- Important Signals: Breakdown Rally, Bear Flag, Volume Breakdown, Resistance Holding, First Rally after MA Bearish Alignment ✅
- Reference Signals: Weak Rally Unable to Reclaim Key Resistance ✅
At least one core signal confirmed by multiple important signals.
Midpoint = 80%
#### Probability Adjustment
- Condition Factor (Volatility): High Volatility Market → × 0.95
- Quality Factor (Consensus & Confidence): High Indicator Consensus (HMA, ADX, MACD all high confidence), High Pattern Confidence → × 1.05
Final Probability = 80% × 0.95 × 1.05 = 79.8%
Remains within High Probability tier (±5%), acceptable.
#### Signal Strength Anchoring
Success Probability ≥ 75% → Use standard signal strength range (1 to 10 or -1 to -10)
Signal Strength = Round(79.8%) = -8
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Historical Success Rate Optimization
Previous trading plan (2025.10.27 17:44:00 UTC+8): Plan Short, position established.
Price from 17:44 to 17:55: Fell from ~4046 to 4040 → aligned with short direction.
Current prediction remains bearish (Plan Short) → consistent with prior plan.
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Step 4: Generate Trading Signal
- Direction signal: Short
- Trade entry price: >>> 4040 <<<
- Signal Strength: =>> -8 <<=
- Stop-Loss price: ->> 4069 <<-
- Take-Profit price: +>> 4011 <<+
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Step 5: Summary of Analysis Conclusions
The XAUUSD pair exhibits a clear bearish trend on the 1-hour chart, characterized by a descending channel, confirmed breakdown below 4060, and strong technical alignment. Pattern recognition yields a final score of 【-11】, driven by high-confidence trend and candlestick signals. Indicators confirm strong bearish momentum: HMA(6/12/24) in perfect bearish order, ADX(14)=26.4 confirming strong trend, MACD histogram expanding negatively, and price below VWAP(30)=4098.63. ATR(14)=38.27 reflects elevated volatility supporting active downside.
Market state is classified as Trend + High Volatility, favoring trend-following strategies. Multiple Plan Short conditions are triggered, including core signal “Failed Retest of Former Support as New Resistance” and several important signals such as Bear Flag, Breakdown Rally, and Resistance Holding. No conflicting conditions exist.
Historical accuracy check confirms prior short recommendation was correct, and current outlook remains consistent.
Final success probability: 79.8%, anchored to signal strength -8 in standard range.
Execution strategy: Enter short at current price 4040, stop-loss at 4069 (above recent swing high and resistance), take-profit at 4011 (prior swing low).