Early in the Asian session, gold (XAU/USD) is trading above the 21 SMA located at 1,895 and below the 200 EMA located at 1,929.
Gold hit a low of 1,871 and then went on a strong technical bounce. On the 4-hour chart, gold has left an engulfing candle formation between 1,873-1,891.
This candlestick pattern could be a positive sign of a recovery in gold in the coming days.
If XAU/USD continues to trade above the 21 SMA and above the downtrend channel, an acceleration to the resistance zone of 1,929 could occur.
According to the Fibonacci grid, the sequence from the low of 1,871 to the high of 1,906 is located at the 61.8% level in 1,885. This Fibonacci level is the key. If gold goes back and reaches this level in the next few hours, it could be an opportunity to buy with targets at 1,929 and 1,937 (7/8 Murray).
The trend according to the 4-hour chart that started from the high 2,000 remains bearish. However, a sharp break in the downtrend channel and a daily close above 1,902 could mean a change in trend and gold could recover part of the losses and could reach the zone 1,950 and 1,985 in the coming days.
Yesterday, the eagle indicator reached the 5-point level which represents an imminent technical rebound. It is expected that in the next few hours gold will continue to rise but should face the first resistance at 1,915 and 1,929.
If gold manages to consolidate above the 21 SMA, it will mean a positive outlook in the short term. Besides, if it manages to break EMA 200 located at 1,930, a change in trend could occur and we could expect a movement towards 1,945; 1967; 1,985 and even to the psychological level of $2,000.
