Early in the American session, gold (XAU/USD) is trading around 1,928.88, above the 21 SMA and below the 2/8 Murray. We can observe a slight upward trend.
According to the 4-hour chart, we can see that gold is trading within an uptrend channel formed since July 29. Now XAU/USD could go through a technical correction as 1,930 sees a strong resistance zone and we could expect the price to drop towards the 21 SMA located at 1,915.
On the daily chart, gold has rebounded from the 61.8% Fibonacci level, traced from the 1,803 low of February 28 to the high of May 3 at 2,077. The 200 EMA located at 1,895 provides gold with support and has prevented a steep decline.
The daily chart shows gold is oversold and is expected to resume its bullish cycle in the next few days. The instrument could reach the 3/8 Murray zone located at 1,968 and could even reach the psychological level of $2,000.
The 4-hour chart shows gold giving a positive signal. However, it could be showing signs of exhaustion, so we could expect a technical correction in the next few hours towards the bottom of the uptrend channel around 1,921.
If this scenario occurs, the metal could resume its bullish cycle. On the other hand, if gold falls and consolidates around 1,915 (21 SMA), this could be viewed as an opportunity to buy since the weekly pivot point is located at this level, which will give us a bullish outlook.
In case gold falls and consolidates below 1,914, the bearish trend is expected to resume and the instrument could reach 1,906 (1/8 Murray) and 1,892.
We could expect a short-term steady uptrend only if gold consolidates above the 200 EMA located at 1,945. With a move above this level, we could expect the price to reach 1,970 and 1,985.
Our trading plan for the next few hours is to buy the XAU/USD pair due to the bullish trend. For this, we must wait for a technical correction around 1,920 and 1,915 to buy with targets at 1,937 (2/8 Murray) and 1,946 ( 200 EMA).
