Yesterday, Gold (XAU/USD) had a very strong bullish move to resistance at 1,969 and from there corrected to 1,914. This low left yesterday coincides with an uptrend channel formed in April. A strong rally towards 1,969 and 1,973.49 is likely in the American session. This level represents strong weekly resistance.
Early in the American session, gold looks determined to continue its uptrend and hit the resistance at 1,966 and 1,974. In the Asian session, XAU/USD hit as high as 1,960 before pulling back to 1,949. Gold is currently trading around 1,957, with a very short-term bullish bias ahead of the US inflation data release.
If gold manages to reach the zone 1,972-1,974 and fails to consolidate above this level, it will be a clear signal to sell with targets at 1,960-1,949.
A daily close clearly above 1,974 would point to a further upward movement. Resistances are seen at 1,990 and at 8/8 Murray and around the psychological level of 2,000.
In the opposite direction, a break of the uptrend channel around 1,949 and could push the price to 1,940, and then to the 21 SMA located at 1,942.
According to the 4-hour chart, we can see that the eagle indicator reached the overbought zone. A technical correction could occur in the next few hours, if gold approaches the zone 1,966 or 1,974.
Our trading plan is to wait for a pullback towards 1,966 or 1,974 to sell with targets at 1,960 and 1,949. On the other hand, we can buy if gold bounces around the uptrend channel at 1,949 with targets at 1,966 and 1,975 and even towards the psychological level of 2,000. The eagle indicator supports our bearish strategy.
