Early in the American session, Gold (XAU/USD) is trading around 2,006.16 above the 21 SMA and above the psychological level of $2,000.
We can see a sharp break above the 21 SMA (1,998). As long as the instrument consolidates above this level, we could expect gold to continue rising and cover the gap it left on April 14 at around 2,023 and could rise to +2/8 Murray at 2,062.50.
On the other hand, in case gold falls and breaks the uptrend channel formed since March 23, we could expect a downward acceleration and the price could fall towards the area of 1,968 (7/8 Murray) and finally, it could reach the 200 EMA located at 1,961.
A daily close below 1,990 would trigger the bearish signal for gold. Therefore we should avoid buying because the price could fall as low as 1,937 in the short term and finally, reach the psychological level of 1,900.
On April 19, the Eagle indicator reached the extremely oversold zone. Since then, it has been giving a positive signal. In view of this, we can expect that any pullback in the XAU/USD pair or a technical correction could be seen as an opportunity to continue buying.
