FX.co ★ Trading Signal for XAU/USD (GOLD) for July 6-7, 2023: buy above $1,903 (21 SMA - 1/8 Murray)

Early in the American session, Gold (XAU/USD) is trading around 1,903.63 below the 1/8 Murray and below the 21 SMA. We can see that gold fell sharply due to the employment data by ADP. A sharp increase in hiring came out to be favorable for the US dollar.

In the next hours, gold is expected to recover above the psychological level of 1,900 and above the zone of 1,906 (1/8 Murray).

Given that gold has been oversold since July 3, this correction could encourage a new bullish sequence and the instrument could reach 1,921(21 SMA) and even the top of the bullish channel at 1,929.

On the other hand, in case gold falls below the psychological level of 1,900, we could expect it to reach the bottom of the downtrend channel around 1,886.

The strong drop seen a few hours ago has left a GAP at 1,920. So, the gap is likely to be covered in the next few hours. Therefore, our trading plan for the next few hours is to buy XAU/USD above 1,903 with targets at 1,915 and 1,921 and finally at the top of the bearish channel at 1,928.

The psychological level of 1,900 represents a key area for the bulls. This level could be seen as an opportunity to buy gold only if the price settles above this level and could reach the 200 EMA (1,1941) in the next few days.