LOOKING TO GO SHORT ON XAU/USD

XAU/USD 4H - You can see here that price has traded into a fair value gap that I have marked out just above the higher timeframe BOS. This here would be acting as the initial pullback before the new impulse to the downside.

It would also be seen as the second shoulder in a classic head and shoulders pattern, which in a more detailed scope of the pair and pattern would be a distribution, this is something price does when its in prep of a down move.

By price distributing its offloading buy orders and introducing sell orders, this is prices' way of preparing for a move to the downside. Whilst price is doing this its important to wait patiently for the right time to enter in on the market.

Once price has finished distributing we should see some kind of relevant break to the downside this will confirm the end of the distribution giving us confirmation that price is now ready to move lower.