Resistance Rejection Points to Bearish ContinuationGold / U.S. DollarFOREXCOM:XAUUSDBULLTRADER42Market Structure chart shows a strong bearish retracement after a sharp rally toward the 4,150–4,160 area. Price has fallen back into a previously tested resistance/supply zone around 4,050–4,060, where the chart anticipates another rejection. The overall idea is based on resistance turning into a selling opportunity. Key Levels Resistance Zone: 4,050–4,060 Previously acted as support. Now being retested from below, making it a potential supply zone. Entry (Sell): Around 4,055–4,060 after bearish confirmation (rejection candle, engulfing candle, or lower high). Stop Loss: Above 4,087.62 This gives room above the resistance and protects against a false breakout. Target: 3,977.60 Matches the highlighted support area where buyers previously entered. Trade Logic The setup suggests: Price retraces into resistance. Sellers defend the zone. Momentum resumes downward. Price revisits the previous support around 3,980. This is a classic pullback-to-resistance continuation trade. Risk-to-Reward Approximate values: Risk: ~28–32 points Reward: ~75–80 points Risk-to-Reward Ratio: Approximately 1:2.5 to 1:3, which is generally favorable if the setup is confirmed. Confirmation Signals to Watch Before entering, look for: Bearish engulfing candle on the 1H timeframe. Long upper wick rejection. Lower highs forming within the resistance zone. Increasing bearish volume or momentum. Failure to close above 4,060. Invalidation The bearish setup becomes weaker if: A 1H candle closes decisively above 4,060. Price breaks and holds above 4,088, indicating buyers have regained control. Suggested Chart Title XAU/USD 1H: Resistance Retest Signals Potential Drop Toward 3,977 Alternative titles: Gold 1H Bearish Setup: Sell the Resistance Retest XAU/USD Technical Analysis: Pullback into Supply Zone Gold Forecast: Resistance Rejection Targets 3,977 Support XAU/USD Short Trade Setup | 1:3 Risk-to-Reward Opportunity