Early in the European session, gold is trading around 1,986.25, within a downtrend channel formed since October 30, above the 200 EMA, and above the 21SMA. Yesterday, gold reached a low of 1,969. From there, it is bouncing with an upward bias.
In view of the fact that gold is above the key level of 1,976, we assume that gold will rise in the coming days and could reach the psychological level of $,2000 and even reach +1/8 Murray located at 2,031.
In the next few hours, gold is expected to fall below 1,986, the level where the top of the downtrend channel is located. If this scenario occurs, XAU could find good support around 1,981 or 1,976. We could go long on gold around this area.
If gold falls below 7/8 Murray (1,968) in the next hours, it could be seen as a negative signal as the price could reach 1,950 and finally, 6/8 Murray at 1,937.
This week, the NFP data will be released which could trigger strong volatility in gold. Hence, we expect an upward move that could push the price up to the psychological level of $2,000.
If the NFPs reveal strong employment, gold could accelerate its fall below 1,968, reach 1,937, and even the psychological level of $1,900.
Since November 1st, the eagle indicator has been giving a positive signal, as the eagle indicator reached the area of 5 points. The correction signal was activated which predicts an imminent technical rebound.
Yesterday during the American session, gold made a strong technical rebound. This strategy was mentioned in our previous article as the eagle indicator touched 5 points.
