Early in the Asian session, gold (XAU/USD) was trading below the 21 SMA located at 1853.44 and within the uptrend channel formed on May 16th.
Gold keeps its uptrend intact on the 4-hour chart. If in the coming hours gold consolidates above the 21 SMA and trades within the uptrend channel, it is likely to reach the resistance zone of 200 EMA located at 1,872.
Additionally, gold has another strong resistance at 6/8 Murray located at 1,875. A sharp break and consolidation on the daily chart above this level could accelerate the strong bullish move and it could reach the psychological level of 1,900 even 7/8 Murray in 1,937.
Last week, the equity market recovered with the main stock indices rising higher. The yields of treasury bonds, on the contrary, declined. If this trend continues this week, gold could reach the 1,900 level in the next few days.
The US dollar is weak, which has allowed the Wall Street indices to rise strongly, accumulating weekly gains to exceed 7.5%. It is the first rise in eight consecutive weeks of falls. According to this market trend, risk appetite could intensify this week and gold could reach the resistance of 6/8 Murray in 1,875 and reach 1,937 (7/8).
According to the 4-hour chart, there is a strong chance that gold will resume its uptrend in the coming days. Therefore, if it consolidates above 1,853 in the next few hours, it will be a signal to buy with targets at 1,872 (200 EMA) and 1,875 (6/8 Murray).
The eagle indicator is giving a positive signal which could favor our bullish strategy. We could open more long positions if gold breaks 6/8 Murray above 1,875, with targets at 1,900, 1,921 and 1,937.
Conversely, if gold breaks below the uptrend channel and below the 21 SMA it will be a clear signal to sell below 1850, with targets at 1,836 and 1,821 the latter representing 61.8% Fibonacci.
