Early in the European session, gold is trading around 1980.52, below the 21 SMA, and above the 200 EMA.
On the H1 chart, we can see that the XAU/USD pair broke the uptrend channel which has been underway forming since October 24th. Now it is expected to continue falling in the coming hours until it finds support around the 7/8 Murray located at 1,968.
Yesterday during the American session gold reached a high of 2,008. Since then, it made a strong technical correction. Now it is consolidating around 1,978 and is expected to fall towards the 1,968 zone as its next target in the coming hours.
Gold could find strong support around 1,975 and a technical rebound could occur from this level at 1,990 (21 SMA). In case gold breaks below 1,975 (200 EMA), it is expected to find the next support at 1,968 which could be seen as a buying opportunity.
On the H1 chart, we can see that gold is oversold. The eagle indicator reached the 5-point zone which represents that an imminent rebound could occur in the coming days.
Our trading plan for the next few hours is to buy gold only in case it trades between 1,975 and 1,968. On the other hand, in case gold reaches the 1,990 zone or the 1,995 level, it could be seen as a signal to sell with targets at 1,968 and 1,937.
