One of the most effective ways to read a market situation is to analyse several trend lines built using the Sperandeo method. This approach lets you objectively determine which direction the market still favours, and also tell a correction apart from a full reversal.
In this situation with gold (XAU/USD) it is important to use not one but at least two trend lines. It is analysing them together that gives a more accurate understanding of what is happening in the market.
📊 How to build trend lines properly
For the analysis you need to draw two independent trend lines:
the first — along the previous completed move in price; the second — along the current move of the market.
This approach lets you assess both the structure of the higher-degree move and the state of the current impulse at the same time. It significantly improves the quality of the analysis and helps you avoid premature conclusions.
📉 What the position of price tells you
The main reference point is where current price sits relative to both trend lines.
If price is above the trend lines, the edge stays with buyers. If price sits below them, that tells you pressure from sellers is still there.
On the chart shown, gold is already below both the rising trend line and the descending trend line of the current move. This configuration indicates the market is holding its downward structure.
🔍 The outlook for price
At this point the priority remains with the move down.
While the descending trend line is unbroken, the main scenario is a continuation of the decline. Any upward moves in these conditions should be treated purely as corrective.
It is very important to understand that a rise in price by itself does not yet mean the trend has changed. Until price can close above the trend line and break it properly, talking about a reversal is premature.
That is exactly why attempts to buy inside a corrective rise come with elevated risk. Without confirmation in the form of a broken trend line, such moves remain nothing more than temporary pullbacks against the main direction of the market.
✅ Conclusion
Analysing several trend lines with the Sperandeo method lets you read a market situation far more accurately and understand which move remains the priority.
In the current situation with gold, price sits under both the rising and the descending trend line. That points to the downtrend staying intact. Until the descending trend line is broken, it makes sense to treat any attempts to rally as corrective moves, while the main scenario remains a further development of the decline.