In the Asian session, Gold reached 1,874, returning to price levels of May 09, just below 6/8 Murray. Gold was supported by falling Treasury yields and positive sentiment from Wall Street indices.
XAUUSD is ready to extend its advance, according to the daily chart. The eagle indicator has gained momentum, maintaining its bullish slopes within positive levels. Furthermore, gold accelerated to the upside after finding buyers around 21 SMA and 200 EMA, both moving averages converging around 1,856.
The daily chart shows that gold has firmly broken the 200 EMA and the 21 SMA. Gold is currently trading around 1,870 which maintains the bullish bias but with a strong barrier at 6/8 Murray around 1,875.
Since May 16, gold has formed a bullish pennant pattern. This upside potential could be confirmed only if gold consolidates above 1,875.
Additionally, we can see that gold has a strong resistance around the psychological level of 1,900 which coincides with the top of the downtrend channel formed since March 8th.
Seeing as gold reached the resistance zone around 1,874, a technical correction is likely in the next few hours and the price could bounce around the 200 EMA located at 1,856.
Our trading plan is to wait for the price to make a technical bounce from around 1,856 to buy, with targets at 1,875 (6/8 Murray) and at 1,903. The latter level coincides with the top of the main downtrend channel.
