XAUUSD reached the 1-hour order block and closed one candle downward. If you go to a smaller timeframe, you'll see that the market tested the fair value gap (FVG) and could potentially move downward. Check Figure 1; if the market creates this type of structure, you'll understand what is happening. Also, check Figure 2
Remember about the entry confirmation on lower timeframes. If today's candle closes with an up arrow, then this will lead to a change of direction in the market upwards and most likely tomorrow it wants to go further on top.
On 1hr chart, XAUUSD has completed a meaningful resistance level as mentioned in the order block so far. Price first moved downwards and closed at a value than in the previous candle. If we turn to smaller time frames, you can see that the market has tested this very FVG - which may mean a possible continuation of drop.
It is important to pay attention for a market structure that validates the expected move. As an example, Figure 1 illustrates a pattern that if repeated signals sustained downside. In Figure 2 we get more clarity into how the market is behaving.
Smaller Timeframes - Confirmation of Entry Should the daily candle closes higher; it marks a market breaking level that will lead way to an uptrend in next day. This change in momentum is an essential clue to help them reposition their strategy based on this development.
As always, you want to increase the potential for success by waiting at minimum of a confirmation signal before triggering an entry.
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