Early in the Asian session, gold (XAU/USD) is trading around the 21 SMA and around the 200 EMA at 1,934.
Since March 22, gold has been trading inside a downtrend channel on the 1-hour chart. Yesterday in the American session, gold tried break out this channel but failed to consolidate above 1,950 and initiated a technical correction.
Early in the American session, US Non-Farm Payroll data will be released. An increase of +492K is expected and the unemployment rate is expected to decline to 3.7%. This could support the US dollar, thus gold could come under bearish pressure.
The lack of progress in the Russia-Ukraine peace talks fueled demand for safe-haven assets like gold and the US dollar. This market sentiment will hardly change in the coming days and gold could reach the psychological level of 2,000 again.
If in the next few hours gold falls and consolidates on 1-hour charts below 1,934, a technical correction is likely to follow and the price could fall to the area 1,920. This move could accelerate the bearish move to 6/8 Murray at 1,875.
On the contrary, if gold consolidates above the 200 EMA and the 21 SMA located at 1,934, it could continue the uptrend. The metal is projected to reach 1,950 and 1,966 which represents the highs of March 23.
Yesterday the eagle indicator the 95-point zone on the 1-hour chart which represents an extremely overbought area. Since then, gold has been trading lower and is likely to continue its downward movement in the next few hours.
Our trading plan for the next few hours is to sell below 1934, with targets at 1,920 and 1,890. The eagle indicator supports our bearish strategy.
