Gold is trading within an uptrend channel on 4-hour charts, yesterday we pointed to the 200 EMA as the key level in 1812, you can review it here.
On a 4-hour chart, gold has been consolidating above the 200 EMA and below the 6/8 Murray resistance line. Gold has failed to break the strong resistance of 1,812. At this time, the metal is trading at 1,793 where both EMAs of 200 and 21 come together.
The sharp break below the 200 EMA and below the uptrend channel could be a sign of a trend reversal, so the price could fall to the support of 4/8 murray, located at 1,750 in the short term.
Investors are attentive to the words of Federal Reserve Chairman Jerome Powell who will give his speech next Friday at the Jackson Hole symposium. His words are highly anticipated. He is widely expected to announce some changes in relation to the bond purchase program.
Another group of investors appears to be convinced that the Federal Reserve will refrain from any immediate reduction of its bond buying program in response to the rapid spread of the Delta variant of Covid-19.
Undoubtedly, next week the market will assimilate these words and gold is set to trade with high volatility. Therefore, technical analysis could guide us to the next path that Gold could take in the short term.
The key is the 1,793 level. Above this level, gold is expected to continue its rise to the 6/8 murray line at 1,812. Above this level, gold will be ready to set free of downward pressure, so the price could go up to the 7/8 of murray located at 1,843.
Our outlook is that gold falls below 1,793 because the eagle indicator that measures the strength and volume of the market is showing a bearish signal. The trading plan would be to sell if gold consolidates below 1,793 with targets at 1,781 and 1,750 (4/8).
Support and Resistance Levels for August 25 - 26, 2021
Resistance (3) 1,813
Resistance (2) 1,808
Resistance (1) 1,799
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Support (1) 1,783
Support (2) 1,774
Support (3) 1,757
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Trading tip for GOLD for August 25 - 26, 2021
Sell if gold breaks below 1,793 (EMA 200) with take profit at 1,781 and 1750 (4/8), stop loss above 1,800.
