XAUUSD recently surged sharply, nearing the 4,300 level; however, after entering overbought territory, the price has begun to stall as profit-taking pressure emerges.

At current levels, I do not favor chasing the price; instead, I am waiting for a pullback before the next leg up.

From my current perspective, the 4,100–4,160 zone is the most critical area to watch. It serves as both a former support base and sits near a cluster of upward-sloping EMAs.

If XAUUSD retraces to this zone and forms an H4 candle with a long lower wick or a bullish engulfing pattern, the likelihood of a buyer resurgence increases. In that scenario, the price could recover to the 4,200 area in the short term, with potential for further gains if momentum is sustained.

On the macro front, the backdrop remains slightly favorable for gold as the USD and US yields have cooled, while the market awaits tonight's Non-Farm Payrolls (NFP) data to reassess the Fed's policy path. Consequently, a "buy on pullback" strategy remains more appropriate than attempting to sell against the prevailing major trend.

Next Signal
Buy Watch Zone: 4,100–4,160
Confirmation: H4 rejection of lower levels and recovery above 4,160
Near-term Targets: 4,200–4,220
Invalidation: Clear H4 close below 4,080