Trading Signal for GOLD (XAU/USD) for August 2 - 3, 2022: sell below $1,785 (weekly resistance - 5/8 Murray)

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Early in the American session, gold (XAU/USD) broke the line 5/8 Murray and is now testing the weekly resistance at 1,785. Gold maintains its uptrend channel and it is likely to reach the top of this channel at around 1,792.

Gold found strong demand due to the decline in Treasury bond yields that remain in the area of lows in months. The 10-year bond yields fell to 2.55%, a level not seen since early April.

Gold reached the 1,787.99 level, last seen since July 4th. It is currently trading below this level but could have difficulties because of the resistance at 1,875 and because the technical indicators are showing signs of a strong technical reversal and exhaustion.

If the strong resistance at 1,785 acts as a barrier, the price could stop the bullish move and gold could make a technical correction and drop towards 1,764.

The ongoing bullish movement means that gold could find it difficult to continue its upward move, as it is showing extremely overbought levels.

In the event of consolidating above 1,781, the next target for gold could be the zone of 6/8 Murray at 1,812. Conversely, a return below 1,781 could ease the technical correction and the price could drop towards the 200 EMA located at 1,764.

As the trend for gold remains bullish, it is likely that we could find a technical bounce at around 1,764 or around 4/8 Murray at 1,750. These levels will give us an opportunity to resume buying, targeting the psychological level of 1,800 and gold could even reach up to 1,812.

Our trading plan for the next few hours is to sell below 1,785. In case of a pullback towards 1,792, there will be a clear signal to sell with targets at 1,775 and 1,764. The eagle indicator is giving a reversal signal, so it supports our bearish strategy.

Trading analysis offered by RobotFX and Flex EA.