Early in the American session, Gold (XAU/USD) is trading around 1,929.75, below the 21 SMA and below the 200 EMA.
We can see that gold is trading within a downtrend channel formed from June, 15. If gold trades below 1,935, it is likely to reach the bottom of the downtrend channel around 1,920.
In the next few hours, we expect the XAU/USD pair to break the 21 SMA located at 1,935. In case gold consolidates above this level and above 2/8 Murray, we could expect a bullish move and reach the top of the downtrend channel and the 200 EMA located at 1,950.
Additionally, with a sharp break and daily consolidation above 1,950, we could expect this to reach 3/8 of Murray located at 1,968.
On the other hand, the odds are that the downward pressure will continue in the next few hours, so we could wait for a point to buy around 1,925, a level that coincides with the minimum of June 15. Alternatively, in case of a technical rebound, we could wait for the area of the downtrend channel bottom around 1,920 to buy.
On the daily chart, the Eagle indicator is giving an oversold signal which could be seen as a signal to buy in the short term. The instrument could reach the psychological level of $2,000 in the next few days.
