Early in the European session, gold is trading around 2,867.80 within the secondary uptrend channel forming since January 29 and within the main uptrend channel forming since January 19.
Yesterday, gold made a strong technical rebound after reaching the low at 2,836. Now the metal is showing positive signals, likely reaching 2,890 in the next few hours.
Gold is showing overbought signs and we could even expect a strong technical correction in the next few hours if the XAU/USD price breaks the uptrend channel and consolidates below 2,847.
The outlook will remain positive above 2,850. So, any technical bounce above this zone will be seen as an opportunity to buy with targets at 2,870 and 2,890.
Strong bearish acceleration is expected to occur below 2,845 and gold could reach 0/8 of Murray located at 2,812 and finally decline to the bottom of the uptrend channel around the psychological level of $2,800.
In the next few hours, the US Non-Farm Payrolls data will be published and we expect strong volatility to occur in the market. So, we should be attentive to the resistance levels at 2,875, 2,890, and even the key level of $2,900.
