Early in the American session, gold (XAU/USD) is trading around 1,942.89, above the 200 EMA, and above the 21 SMA located at 1,928. We can see a strong break above the 200 EMA which was due to the inflation data that came out lower than expected by analysts.
In the next few hours, XAU/USD is expected to reach strong resistance of 1,955. In case this happens, we could expect that gold finds a strong rejection because there is a weekly resistance and the daily R_3 resistance. Therefore, it could be seen as an opportunity to sell with targets at 1,938 and 1,928.
In case gold reaches the 1,940 -1,938 zone, this could be seen as an opportunity to buy with the targets at around 1,955. Conversely, with a sharp break below 2/8 Murray located at 1,937, gold is likely to have a downward acceleration and the price could reach 1,928 and even the bottom of the uptrend channel around 1,925.
We expect gold to consolidate around 1,955 and this could be seen as an opportunity to sell gold on condition it falls below this zone. A daily close above 1,960 could be seen as a bullish continuation signal and the metal could reach 3/8 Murray located at 1,968.75.
The Eagle indicator reached the 95-point zone which represents strongly overbought levels. Therefore, we can see that in the next few days, gold could make a strong technical correction towards 1,930.
