In the European session, gold (XAU/USD) fell towards the 200 EMA around 1918. This moving average has acted as strong support which has allowed gold to rebound. Early in the American session, the metal is trading at 1933.
Treasury yields are pulling back on Thursday, which is a positive for the metal. The 10-year rate is at 2.31%, the lowest level since March 24.
According to the 4-hour chart, gold is breaking a downtrend channel that was formed since March 23, which could benefit gold and its price could rise until 1,966 and even reach 8/8 Murray at 2,000.
XAU/USD needs to trade above 1,937 to enable a possible test of the 1,966 zone, which is a strong barrier where weekly resistance is passing. A close above 1,966 could accelerate the bullish move to the psychological level of 2,000.
In the opposite direction, below 1,918, the bearish bias would intensify exposing 1,900 and the weekly bottom of 1,890. A daily close below 1,910 would be a sign that the downtrend could continue until reaching 6/8 Murray at 1,875.
Our trading plan for the next few hours is to buy above the 21 SMA located at 1,925 or above the 200 EMA located at 1,921, with targets at 1,937 and 1,966. The eagle indicator is giving a positive signal which supports our bullish strategy.
