In the European pre-market, XAU/USD (Gold) is trading above 6/8 murray and above the SMA of 21. Gold has been bouncing above the Moving Average of 21. This dynamic support is maintained for XAU / USD with an uptrend.
Investor sentiment around the price of gold continues to be supported by continued increases in inflows of gold exchange-traded funds (ETFs) and a bearish consolidation of the US dollar along with bond yields. Risk aversion is attracting more investors to buy the gold as a safe haven asset.
Gold has found strong resistance at the $ 1,889 level, forming a double top. At this time of writing, the price is just below $ 1,884, showing exhaustion in the bullish force.
If it breaks the $ 1,889 level, it could quickly go to the next resistance at $ 1,906 there, it is located +1/8 of the murray area of extreme overbought. To reach this goal, gold could find a rebound in the 8/8 zone of murray around $1,875.
As gold remains above the 8/8 murray and above the 21 SMA, it has the prospect of reaching the psychological level of $ 1,900.
On the other hand, if gold makes a break below the SAM of 21 around $ 1,875, we must sell because the price could break the ascending wedge pattern and could fall to the support of the 4-hour uptrend channel and until 7/8 of murray, located in $1,843.
In the graph, we have plotted the levels at which Gold could trade within the ascending wedge, a break of this wedge could define the next movement, our recommendation is to sell below $ 1,889 or a consolidation below $1,875 with the target at $1,843 in the short term.
Support and Resistance Levels for May 24 – 25, 2021
Resistance (3) 1,909
Resistance (2) 1,901
Resistance (1) 1,890
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Support (1) 1,880
Support (2) 1,871
Support (3) 1,861
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Trading tip for XAU/USD (gold) for May 24 - 25, 2021
Sell bellow 1,874 (SMA 21 and 8/8), with take profit at 1,843 (7/8), stop loss above 1,880.
Buy if rebound 1,875 (8/8 of murray), with take profit at 1,885 and 1,900 (+1/8), stop loss below 1,870.