Early in the American session, Gold (XAU/USD) is trading around 1,905.
Since the opening of trading this week, gold has managed to fall sharply below the 200 EMA located at 1,937. The metal is expected to continue its decline until the strong support of 1,900 and even into 1,890.
Gold falls in correlation with stock markets in Europe and Wall Street futures. Today at the opening of the American session, we see a strong bearish bias.
However, gold could find strong support at 1,900. In case of breaking this level, it could reach the zone 1,890. If gold consolidates above both levels in the next few hours, a technical bounce could occur, thus providing an opportunity to buy.
According to the 4-hour chart, we can see that the eagle indicator is reaching the zone of 5 points which represents an extremely oversold market. In the next few hours, we could expect a technical bounce around the area 1,900 or 1,890. This will give us an opportunity to buy with targets at the top of the downtrend channel around 1,925. The price could even reach the 200 EMA and 7/8 Murray at 1,937.
In case gold manages to rebound and consolidate around 1,920, strong short-term pressure could be relieved. This could favor gold and oush its price up to 1,940.
The US dollar continues its upward movement. In the European session, it reached 101.72. The US dollar is also affecting gold because investors are expecting an increase in interest rates by the FED and have stopped taking refuge in gold in view of the lack of progress in the crisis between Russia and Ukraine.
Our trading plan for the next few hours is to wait for a consolidation between the area 1,890-1,900. Any technical bounce above this zone will be an opportunity to buy. We expect gold to reach 1,925 and even the key level of the 200 EMA at 1,939.
