The XAU/USD chart is currently showing bearish momentum, indicating a potential move down toward the initial support level at 1804.71. This support level is considered significant as it represents an overlap of support. On the upside, the first resistance level at 1891.81 is noted as a pullback resistance, potentially limiting further upward movement.
Recommended Trade Directions:
1. Short Position:
Traders could consider opening a short position if the XAU/USD pair breaks below the initial support level at 1804.71. This bearish move could indicate a continuation of the downward momentum, potentially targeting lower support levels.
2. Long Position:
Alternatively, traders might consider opening a long position if the XAU/USD pair successfully bounces off the initial support level at 1804.71 and starts to move higher. However, caution should be exercised near the first resistance level at 1891.81, as it could potentially restrict further upward movement.
It is important to note that trading decisions should be based on individual analysis, risk tolerance, and market conditions. Traders should also consider implementing appropriate risk management strategies, such as setting stop-loss orders and monitoring market developments closely.