XAUUSD – SMC Supply Rejection Inside Ascending Channel
XAUUSD – SMC Supply Rejection Inside Ascending Channel: Is Gold Preparing for a Liquidity Sweep?
Gold is currently trading around 4,165 after another unsuccessful attempt to sustain its recovery above the 4,190 – 4,200 resistance area.
The latest H2 chart shows gold continuing to consolidate inside a broad ascending channel, with repeated reactions from both its upper supply regions and lower demand zones. Although the broader channel maintains a slightly bullish slope, the internal price structure has become increasingly uncertain.
Buyers have repeatedly defended lower prices, but their recovery attempts have struggled to establish sustained acceptance above previous swing highs.
The most important observation is that gold has recovered strongly from the lower liquidity area near 4,075 – 4,085, yet the market continues to encounter selling pressure around 4,187 – 4,200.
This creates an important conflict between the broader channel structure and the short-term distribution of liquidity.
The question now is whether gold will sweep the remaining buy-side liquidity before reversing or whether sellers can force another decline directly from the current resistance structure.
From the Smart Money Concepts (SMC) perspective, gold is showing a series of liquidity tests within a well-defined trading range.
The sharp decline toward 4,075 – 4,085 on October 15 tested liquidity beneath previous short-term lows. Buyers responded with a strong recovery, suggesting that sell-side liquidity may have been collected before demand returned.
However, that bullish reaction has not yet produced a confirmed breakout above the major internal resistance.
Instead, gold has continued to form repeated swing highs around 4,190 – 4,200, where sellers have consistently interrupted recovery attempts.
This region represents the main SMC supply zone on the chart.
The repeated failure to hold above this area suggests that buyers have not yet demonstrated enough strength to establish a sustained bullish expansion.
The nearby 4,187 level acts as an early structural barrier. If gold remains below this resistance, the recent recovery may continue to resemble a corrective move rather than a confirmed bullish trend.
A brief move above 4,190 – 4,200, followed by strong bearish displacement, could indicate a buy-side liquidity sweep.
Such a reaction would strengthen the possibility that the market is preparing for another rotation toward lower liquidity.
However, a liquidity sweep cannot be confirmed simply because price reaches resistance. Traders should look for rejection, displacement, and a subsequent bearish market structure shift.
The ascending channel structure adds another important dimension.
Gold remains inside a broad, slightly rising price channel. The lower boundary has repeatedly attracted buying interest, while the upper half of the channel continues to contain several important resistance areas.
The internal channel midpoint is currently near 4,145 – 4,155, making it an important reference for determining whether buyers can maintain short-term control.
If gold falls below this internal structure, the market may begin rotating toward the lower half of the channel.
The main lower liquidity support remains around 4,070 – 4,085, where buyers previously responded to selling pressure.
Above the current price, the 4,243 – 4,258 region represents the upper channel resistance.
This is a significant technical area because it combines the projected upper channel boundary with a historical resistance zone.
If gold eventually breaks above the immediate SMC supply around 4,190 – 4,200, buyers would first need to overcome the higher resistance near 4,216 before the upper channel becomes a realistic upside objective.
Beyond that, the market could encounter additional resistance near 4,299 and the extended supply region around 4,315 – 4,330.
These higher targets remain conditional and should not be interpreted as confirmed destinations while price continues trading beneath its immediate supply structure.
Key levels to watch:
Current price: 4,165
Immediate structural resistance: 4,187
Main SMC supply zone: 4,190 – 4,200
Higher resistance: 4,216
Upper channel resistance: 4,243 – 4,258
Major liquidity reference: 4,299
Extended resistance zone: 4,315 – 4,330
Internal channel support: 4,145 – 4,155
First downside reaction: 4,120 – 4,140
Key demand level: 4,106
Lower liquidity support: 4,070 – 4,085
Deep liquidity reference: 4,063
Bullish confirmation: Sustained break above 4,200
Bearish confirmation: Confirmed break below 4,140
If gold maintains support around 4,145 – 4,155, buyers may attempt another recovery toward 4,187, followed by the main supply area around 4,190 – 4,200.
This is the first important resistance region where a meaningful reaction could develop.
If price enters this zone and produces a liquidity sweep followed by bearish displacement, sellers may regain short-term control.
In that case, gold could initially return toward 4,145 – 4,155 before testing 4,120 – 4,140.
A confirmed breakdown below 4,140 would suggest that the internal channel support is weakening and may expose the next demand level around 4,106.
If buyers fail to establish a meaningful reaction from 4,106, the next major downside destination becomes 4,070 – 4,085.
This lower zone is particularly important because it aligns with previous sell-side liquidity reactions and the lower boundary of the broader ascending channel.
A deeper sweep toward 4,063 remains possible if selling pressure intensifies.
However, such a decline would initially represent a deeper rotation within the channel. A sustained breakdown below the channel boundary would be required to confirm broader bearish deterioration.
The alternative bullish scenario should also be considered.
If gold reclaims 4,187 and breaks above 4,190 – 4,200 with strong bullish displacement, the immediate bearish rejection scenario becomes weaker.
A successful retest of this former supply area as support would strengthen the bullish interpretation.
Under that scenario, gold may continue toward 4,216, followed by the upper channel resistance around 4,243 – 4,258.
If buyers can establish sustained acceptance above 4,258, the next potential objectives would be 4,299 and 4,315 – 4,330.
From the SMC perspective, the difference between a liquidity sweep and a genuine bullish breakout lies in the reaction after resistance is tested.
A sweep followed by rejection favors a bearish rotation. Strong displacement and successful support confirmation favor bullish continuation.
From a risk-management perspective, gold is currently positioned between internal channel support and major overhead supply.
That makes confirmation particularly important. Entering before a clear structural shift may expose traders to false breakouts or sudden liquidity-driven reversals.
Hannah’s view:
Gold remains inside a broad ascending channel, but the internal market structure is showing signs of hesitation after repeated failures around 4,187 – 4,200.
The main SMC supply region remains the most important area to watch.
My preferred scenario is to observe whether gold retests 4,190 – 4,200 and forms a bearish liquidity reaction.
If sellers defend this zone and price confirms a bearish market structure shift, gold may rotate toward 4,140, then 4,120 – 4,106.
If demand continues weakening, the next major liquidity area becomes 4,070 – 4,085, with 4,063 acting as the deeper downside reference.
However, if buyers successfully reclaim 4,200, the market may continue toward 4,216, followed by 4,243 – 4,258.
A stronger bullish breakout could eventually bring 4,299 and 4,315 – 4,330 into focus.
Main view: Gold remains range-bound inside a broader ascending channel, but repeated rejection from the 4,187 – 4,200 supply region keeps the risk of another corrective decline active. A confirmed break below 4,140 would favor movement toward lower liquidity, while sustained acceptance above 4,200 would strengthen the bullish outlook and shift attention toward the upper channel.
No confirmation means no trade.
Do you think gold will sweep the liquidity around 4,080 – 4,063 before recovering, or will buyers finally break above 4,200 and challenge the upper channel resistance?
source
https://www.tradingview.com/chart/XAUUSD/FTQ7GcfI-XAUUSD-SMC-Supply-Rejection-Inside-Ascending-Channel/
