In the Asian session, XAU / USD (gold) is trading below the EMA 200 and below the bearish channel on a 1-hour chart, showing a bullish bias, although it is reaching a resistance zone of around 1,896.
Last week, the price of XAU / USD reached the lows of May 19 at $ 1,854 and from there we saw an upward rebound to the 1,894 zone of the 200 EMA after the US employment report. Now the yellow metal is trading below this level. Employment in the United States increased by 559,000, below the market consensus of 650,000.
The advance in gold was due to the fall of the USDX dollar in the market after the NFP data and also due to a drop in the yields of Treasury bonds. Yields of 10-year benchmark bonds fell to 1.59%, close to its weekly lows.
Gold is expected to find strong resistance below the psychological level of 1,900.00. Therefore, while the XAU / USD trades below this level, we expect it to remain under downward pressure, because the 200 EMA is acting as strong resistance according to a 1-hour chart.
On the other hand, a bounce above the 8/8 area of murray is now a strong support. A few pips higher 21SMA at 1,879 is located. At this level, an upward rebound could occur with targets at 1,890 and 1,900.
The technical reading of the eagle indicator is showing a bullish signal for this reason. We expect a pullback towards the 1,896 area, and then a technical correction will follow.
Our recommendation is to sell around the zone of 1,896, or buy if gold makes a bullish rebound in the zone of 1,875 and 1,879, targeting 1,895 and 1,900.
Support and Resistance Levels for June 07 – 08, 2021
Resistance (3) 1,948
Resistance (2) 1,919
Resistance (1) 1,906
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Support (1) 1,880
Support (2) 1,865
Support (3) 1,859
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Trading tip for XAU/USD (gold) for June 07 - 08, 2021
Sell below 1,896 (EMA 200) with take profit at 1,885 and 1,875 (8/8), stop loss above 1,900.
Buy if rebound 1,879 (SMA of 21) with take profit at 1,885 and 1,896 (EMA 200), stop loss below 1,875.