Gold XAU/USD has been consolidating for three weeks in a row around the 1,812 area. From this point, we saw an impulse towards the resistance level at 1,831. In this area, a triple top reversal pattern was formed.
In view of the triple top formation, we believe that gold will continue to be under downward pressure. The pivot point is the 2/8 murray zone around 1,812.
Below the 21 SMA and below the 2/8 murray line located at 1,812.50, it could be a good opportunity to sell with targets in the 200 EMA zone located at near 1,799.
On Wednesday after ADP employment report, gold made an upward movement due to the tepid employment growth of 330,000, below the 695,000 expected. This weakened the US dollar and provided gold a strong boost.
Tomorrow, the US Non-Farm Payroll report will be released. The suspense is keeping the market on edge. According to the ADP report, expectations are negative for the US dollar.
Therefore, we believe that gold could gain a new bullish momentum and rebound to the resistance zone of 1,830 again, if the NFP data is negative for the US dollar.
The zone of 200 EMA (1,799) is the last support that adds a bullish outlook for gold. A technical bounce off this level will be a good opportunity to buy, with targets at 1,812 and 1,830.
On the contrary, a consolidation and break below 1,799 could be a sign of a trend reversal and could enable a decline towards the 1/8 murray zone located at 1,781.
The eagle indicator is approaching the oversold area. It is generating a bearish signal for now, which could push gold down in the next few hours.
Support and Resistance Levels for August 05 - 06, 2021
Resistance (3) 1,833
Resistance (2) 1,816
Resistance (1) 1,812
----------------------------
Support (1) 1,801
Support (2) 1,793
Support (3) 1,776
***********************************************************
Trading tip for GOLD for August 05 - 06, 2021
Sell below 1,812 (2/8), with take profit at 1,799 (EMA 200), stop loss above 1,817.
Buy if rebound 1,799 (EMA 200), with take profit at 1,810 (2/8) and 1,831 (strong resistance) stop loss below 1794.
The material has been provided by InstaForex Company - www.instaforex.com