The daily chart of Gold shows that the metal is trading within a downtrend channel which has been extending since May 14. Now it would be close to start a trend change, but the price has triple resistance where the top of the channel, the 200 EMA and the 6/8 line of murray converge (1,812).
The gold market opened the week higher and XAU / USD rose from the level of 1,781, breaking the symmetrical triangle pattern (see the chart). Until the closure of the bullish candle on Monday at 1,804, this pattern could sustain momentum, so gold could rise to the zone of 1,812.
This bullish momentum of yesterday occurred due to the weakness of the USDX which fell from the high of 93.71 (8/8 of murray). This level was predicted by us as we had already indicated it in the previous analysis. Now we believe that the USDX could make a correction to the 61.8% of Fibonacci and it will enable a new bullish momentum of gold.
But first, gold should also make a technical correction, since it is showing overbought signs, facing extreme resistance at 1,812.
We believe that the zone between 1,812 and 1,806 represents strong resistance and gold could fall to the 5/8 murray line located at 1,781 because the 200 EMA is a strong barrier which could prevent a bullish rally.
On the contrary, if Gold breaks the key level of 1,812, the price will be free for a new bullish stage. So, the price could reach the area between 1,843 and 1,875, the level of 8/8 murray.
Our outlook for now remains bearish because we are confident in the price action patterns. We can also add the eagle indicator on 4-hour charts. As the indicator has reached the 95 level, this signals an imminent technical correction.
The reasonable trading idea is to sell at any level below 1,812 with targets at 1,781 and towards the pivot point of 4/8 Murray at 1,750. The eagle technical indicator, that measures the volume and the strength of the market, shows a signal of an imminent correction in the next few hours.
Support and Resistance Levels for August 24 - 25, 2021
Resistance (3) 1,826
Resistance (2) 1,815
Resistance (1) 1,806
Support (1) 1,796
Support (2) 1,785
Support (3) 1,774
Trading tip for XAU/USD (Gold) for August 24 - 25, 2021
Sell below 1,812 (triple resistance), with take profit at 1,795 and 1,781 (5/8), stop loss above 1,818.The material has been provided by InstaForex Company - www.instaforex.com