Gold (XAU/USD) is trading around 1991.15, above the 21 SMA and below the psychological level of $2,000. We expect it to resume its bullish cycle if it consolidates above 1,989.
Yesterday, the price of gold fell back after reaching a maximum of 2,009 towards a minimum of 1,983. A correction of $26 means that it could be setting up for a technical correction in the short term only if it falls below the weekly pivot point of around 1,985.
The 10-year US Treasury yield recovered from yesterday's low and closed the day at around 3.448%. If it continues to rise in the next few days, it could exert strong downward pressure and XAU/USD could reach the area of 1,968 (7/8 Murray).
The daily pivot point is located around 1,993. If gold consolidates above this level in the next few hours, it could reach the psychological level of 2,000. Above this level, we could expect XAU/USD to continue rising until it breaks the bearish trend channel located at 2,009 and could cover the GAP left in 2,023 and finally reach +1/8 Murray around 2,031.
On the contrary, in the event that gold falls below the 21 SMA and trades below 1,985, we could expect a downward acceleration and it could reach the 200 EMA located around 1,968.
On April 25 and 26, the eagle indicator reached the extreme oversold zone. It is likely that this is a sign for the instrument to continue ascending in the coming days. The key will be to watch 1,989 (21 SMA). Above this level, we could continue to buy with targets at 2,031 (+1/8 Murray).
