Gold is rising for the second day in a row, accelerating the rebound after falling to lows of 1,780 (2/8) last Friday.
Gold is currently trading around 1,806. Since Friday so far, it has had a recovery of about $26. This is very encouraging. It is likely that in the next few days it will continue to trend up to 5/8 of Murray at 1,528.
The dollar opened the week under bearish pressure, correcting lower after the rally after the FOMC meeting. Gold certainly took advantage of the soft US dollar. The metal rose above the 2/8 Murray and above the 21 SMA.
Gold is expected to trade within the price range between 3/8 Murray (1,797) and 4/8 Murray (1,812) ahead of US data release later this week.
We can see the general weakness of the dollar, along with the rise in equity markets and the decline in Treasury yields. These are the factors for the recovery of gold. So, gold is likely to continue its upward trend in the next few days.
However, the strong resistance at 1,812 coupled with the 200 EMA and 4/8 Murray will prove to be a strong barrier for gold. If it fails to consolidate above this level, we will have an opportunity to sell with targets at 1,797 and 1,781.
Above 1,812 gold could again enter an uptrend and could rally to the high of 1,853. Conversely, a daily close below 1,792 could continue the dominant downtrend with targets at 1,781 (2/8) and down to 1,765 (1/8).
Our trading plan is to buy above the 21 SMA (1,797) and sell below the 200 SMA (1,812). The eagle indicator supports our bullish strategy.
Support and Resistance Levels for February 1 - 2, 2022
Resistance (3) 1,828
Resistance (2) 1,817
Resistance (1) 1,812
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Support (1) 1,796
Support (2) 1,788
Support (3) 1,781
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Scenario
Timeframe H4
Recommendation: buy above
Entry Point 1,796
Take Profit 1,812 (200 EMA), 1828 (5/8)
Stop Loss 36,500
Murray Levels 1,781 (2/8) 1,796 (3/8) 1,812 (4/8) 1,828 (5/8)
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