XAU/USD is trading at 1,762 showing exhaustion and consolidating below the 200 EMA. This pivot point is the key because if gold manages to break above this level, it could accelerate its bullish move towards 1,781 and to the psychological level of 1,800.
After a consolidation phase above 1,714 earlier in the week, the price of gold gained upward momentum and rose to its highest level above 1,763. This recovery could be a positive sign, so we expect the metal to continue its rise in the coming days.
The short-term technical outlook is in favor of the bulls and XAUUSD could extend its rally ahead of the US jobs report. Any pullback and as long as it trades within the bullish channel could be seen as a signal to buy on the rebound.
Last week, Jerome Powell said that from now on they would not give any guidance on interest rates. These comments triggered a dollar sell-off and weighed on US Treasury yields. In turn, being negatively correlated, this provided a boost to XAUUSD.
According to the 4-hour chart, gold is trading below the 200 EMA and within the uptrend channel. According to the eagle indicator, we see that gold is overbought and a technical correction is likely in the coming days.
Since July 28, the eagle indicator is showing a buy signal, so it is imminent that there will be a technical correction in the next few hours towards the 21 SMA located at 1,741.
The market sentiment report shows that there are 85% of traders who are buying gold and 15% who are selling. A technical correction toward support levels is highly probable which will be seen as an opportunity to buy. Gold could resume the uptrend until it reaches the psychological level of $1,800.
Our trading plan for the next few hours is to sell below the 200 EMA located at 1,763 with targets at 1,741 and 1,735. The eagle indicator is giving a negative signal which supports our bearish strategy.
