Early in the European session, gold (XAU/USD) is trading around 2,020.50, below the 21 SMA and the 200 EMA. On the H1 chart, we can see that gold is trading inside a downtrend channel under selling pressure because it is below $2,028 where the two moving averages converge.
Gold is expected to continue to fall in the coming hours and could reach 2,014. If bearish strength prevails, it could reach the psychological level of $2,000.
If gold breaks and consolidates above 2,032, there will be a resumption of the bullish cycle during which gold could reach the key level of 2,062 (5/8 Murray). This could be seen as a buying opportunity.
According to the eagle indicator, gold is showing an oversold signal. Therefore, in case there is a fall towards the bottom of the downtrend channel around 2,006 or around the psychological level of $2,000, it will be seen as a buying opportunity.
As long as gold trades below 2,030, the outlook will remain negative for gold and we could expect it to reach 4/8 Murray at $2,000.
Market sentiment shows that there are 56.50% of traders who are buying gold. It means that the bearish pressure could continue as our strategy is contrary to the consensus of most traders. If this percentage increases, we could expect the break of the psychological level of $2,000 so that the price could reach 3/8 Murray around 1,937.
Our trading plan for the next few hours is to buy gold above 2,023 or in case of a fall around the psychological level of $2,000 or 2,005 with the target at 2,030. Additionally, in case there is a break of the downtrend channel, it could be seen as an opportunity to continue buying with the target at 2,062.
