Gold is trading around 1,992.84, bouncing after reaching the bottom of the downtrend channel forming since January 25 and after reaching the low of 1,984.12. Consolidation is going on and a technical rebound is likely to occur in the next few hours until reaching the top of the downtrend channel around 2,018.
The daily pivot point is located around 1,990, which adds a positive outlook, but we should expect the instrument to trade above this level. Then, we could have a bullish signal to buy with targets at the psychological level of $2,000 and the 21 SMA at 2,007.
On the contrary, in case gold falls below 1,990, we could expect it to continue with the bearish movement and it could again test the bottom of the bearish trend channel around 1,980. If the bearish force prevails, XAU/USD could reach - 1/8 of Murray located at 1,968.
Our outlook could remain bullish with an opportunity to buy gold, only if it consolidates above 1,990. If this scenario occurs, we can buy with targets at 2,007 (21 SMA) and 2,026 (200 EMA).
On February 13, the eagle indicator reached the extremely oversold zone. Since then, it has been given a positive signal, but we should expect gold to gain momentum. Meanwhile, we could look for opportunities to buy above 1,990 or above the psychological level of $2,000.
