In the early American session, the price of the yellow metal is trading below the SMA of 21 and below the EMA of 200, after having broken the ascending wedge pattern, with a probability of a bearish movement in the next few hours.
Firm expectations that the Fed will maintain its ultra-loose monetary policy for a longer period acted as a tailwind for the underperforming yellow metal. However, there could be a downward correction for a new bullish wave as the technical analysis shows an imminent correction in the next few hours.
If you look at the 1-hour chart of XAU / USD (gold), we clearly notice the break of the technical pattern. It means that there could be a fall to 8/8 of murray, a strong support zone or until 1,865 where the monthly support is located.
The technical reading of the eagle indicator is showing that there could be a bearish movement given that the divergence signal carried several days ago. Therefore, a decline below the 200 EMA is likely as there is a lot of downward pressure for below this area.
On the contrary, a bullish move above the 200 EMA around 1,896 will be a new opportunity to buy, targeting up to the +1/8 murray level at 1,906.
Our recommendation is to sell below the 200 EMA and below the ascending wedge technical pattern with targets at 1,875 and 1,870.
Support and Resistance Levels for June 03 – 04, 2021
Resistance (3) 1,913
Resistance (2) 1,903
Resistance (1) 1,898
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Support (1) 1,888
Support (2) 1,883
Support (3) 1,861
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Trading tip for XAU/USD (gold) for June 03 - 04, 2021
Sell below 1,896 (EMA 200 and technical pattern) with take profit at 1,875 (8/8) and 1,870, stop loss above 1,900.
The material has been provided by InstaForex Company - www.instaforex.com