Early in the European session, Gold (XAU/USD) is trading around 1,954.01 and bouncing around the 200 EMA, showing some recovery after several consecutive sessions of decline. Gold, since reaching the 2,005 level, formed a bearish channel which fell without a technical correction.
In the next hours, the unemployment claims report will be released. Later in the day, Jerome Powell's comments are expected, but it is unclear at this stage whether he will provide any news. If he hints that the Fed will end its monetary policy, gold could gain upward momentum and reach 1,971 and even the psychological level of 2,000.
According to the eagle indicator, gold is in an extreme oversold zone, which could lead to a technical rebound in the next few hours. The key will be to wait for consolidation above the 200 EMA, then it will be seen as a buying opportunity with targets at 1,958 and 1,971.
200 EMA (1,944) could provide strong support for gold if it consolidates above 1,945, and we could expect it to reach 7/8 Murray at 1,968 and even the 21 SMA at 1,971.
On the other hand, a drop below the 200 EMA could reach 6/8 Murray at 1,937. Around this area, if gold rebounds due to oversold conditions, it will be considered a technical correction zone and a buying opportunity.
