On the H4 chart, a strong resistance zone has formed, and the price is currently approaching this strong resistance zone as it moves higher. Furthermore, the 200 moving averages are converging at the same level, making this a critical resistance zone for us. In addition, a bearish hidden divergence has formed between the first high at 1830 and second high at 1782.51, which was followed by a bearish divergence based on the MACD indicator. We can interpret these as indications of bearish pressure, and there are currently no signs that contradict this bearish view. So, based on all of this, there are two probable scenarios from here, in my opinion. The price may travel directly lower from the current zone, or it may move in the opposite direction. Price may make a one-time push higher, reaching major resistance, and then bouncing lower from this area. In any case, unless the critical resistance zone holds, my outlook remains bearish. In my view gold may be settle at 1765 before making an uptrend as Covid fear is again gearing up.

XAU/USD

Aug 23 2021