Last Sunday, gold opened at 1.763 and fell rapidly in a matter of minutes to the weekly low of 1.680. Later, it had recovered more than 50% of the loss. It maintained the bullish momentum tone and closed on Friday at 1.779 despite the strong fall.
Gold has left a candle pattern called Pin Bar, thus showing that the 1680 level is a strong bottom. Remarkably, this is the same level gold had touched on March 28 and March 7, which could give the idea of a triple bottom pattern.
On the weekly chart, gold has a strong ceiling in the 1805 area, there is the 200 EMA. Now, it has become a strong resistance. A break above this level could signal a change in trend to the medium term.
On the contrary, since the key point will be the 1805 level, as long as it is below this level, the bearish force could prevail and push gold to the support of 1.750 and 1.718.
On the 4-hour chart, we can see that gold is trading within an uptrend channel. It is now facing the 5/8 murray line in 1.781. Since it is showing sign of exhaustion, a correction is likely towards the bullish channel support around 1.765.
If gold maintains and consolidates above 1781, we expect an upward momentum to the 200 EMA located in 1795. This level will be key since there is strong resistance combined with the weekly chart. It will be a good opportunity to sell in this zone.
If gold falls below 1781, immediate support is located at the level of 1766. If this level is broken and the downward force prevails, we expect a fall to the level of 1753. There is the SMA of 21 and the pivot line of 4/8 murray that represents strong support.
Support and Resistance Levels for August 16 - 17, 2021
Resistance (3) 1,804
Resistance (2) 1,798
Resistance (1) 1,789
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Support (1) 1,770
Support (2) 1,760
Support (3) 1,746
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Trading tip for XAU/USD (Gold) for August 16 - 17, 2021
Sell below 1,781 (5/8), of if pullback at 1,795, with take profit at 1,766 and 1753 (4/8), stop loss above 1,787 and 1803.