According to our analysis published on 29th July, we emphasized on the head and shoulder pattern which was one of the major factors to provide dovish momentum to XAUUSD and make it lose its support at 1814. We also mentioned 1827-1834 market price as a psychological level for gold to break, as in the high of gold in H4 i.e 1834 in order to move any higher towards 1861. Yestarday weak data release on Automatic Data Processing Non Farm Employment Change provided some strong bullish momentum to gold by making it reach for its 1830 resistance again, giving a psychological blow to the retail traders by approaching the critical level for the third time. Fortunately strong data release from Institute for Supply Management on Services PMI, reversed the gains on gold and pushed dollar higher. Gold is still following our dovish signal and is expected to go lower but certain factors discussed below might cause a short term hurdle in gold from breaking out below 1781.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

In daily chart XAUUSD has entered the ichimoko cloud and its bearish outline is acting as a support along with our 50% fibb level below our current market price. In four hourly chart gold has taken an exit from the ichimoko cloud at 1811 but our lower trend line is indicating to cause a temporary bullish reversal to the pair. 1798-1834 level in daily chart is entirely within the ichimoko cloud, marking them as a no trade zone, by this we are trying to suggest not to take extra risk on the golden commodity unless we have found a breakout at either ends of the aforementioned prices. There are chances of the market reaching to 1811.50 zone again but the exponential moving average 50 and 200 are both lying at the same price in daily as well as four hourly time frame, which might provide us with a continuation of bearish trend again. 

XAUUSD D1

Aug 05 2021