In the European session, the price of the metal fell to 1,886.49, the lowest level since the end of February and then bounced higher to 1,903.
Rising expectations of an increase of 50 basis points (bps) by the Federal Reserve in May are boosting the dollar index higher.
Early in the American session, the dollar index reached the key level of 103.00. We note that it has a strong bullish trend. The strength of the dollar index puts pressure on gold and it could fall towards the support zone of 1,883 and even to 1,875 (6/8).
If the price returns above 1,900, there is the 21 SMA on the 1-hour chart. If it continues to consolidate above this level, it would be a positive sign for gold and it could anticipate even more rises, especially if there is a break of 1,915.
Gold (XAU/USD) has strong resistance at 1,915, the top of the downtrend channel formed on April 14. A sharp break in this trend channel could accelerate the upward movement and the price could reach the 200 EMA located at 1,930.
A daily close above 1,930 could signal a change in trend and could be the start of a bullish wave that could push the price up to the levels of 1,962, 1,986 and even 8/8 Murray around the psychological level of 2,000.
Conversely, if gold falls below 1,898 and closes on daily charts below this level, the price will come under selling pressure again and it could reach the key support of 6/8 Murray located at 1,875.
Additionally, if gold falls below 1,890, it could accelerate the bearish move and cover the GAP left on February 25 at about 1,886.44. If bearish pressure prevails, the metal could even reach the zone of 1,875 (6/8 Murray).
Our trading plan for the next few hours is to sell below 1,900, with targets at 1,890 and 1,883. On the other hand, a technical bounce around weekly support at 1,883 could be an opportunity to buy gold with targets at 1,900 in 1,915.
