Early in the American session, gold is trading around 2,885 bouncing back after hitting a low of 2,876 during the European session. This level coincided with the low of February 13, which now acts as an important support.
In case gold consolidates above 2,876 in the next few hours, we expect it to continue rising so that it could reach 6/8 Murray at 2,890. If the price breaks above this level, it could reach the top of the downtrend channel forming since February 21 around the psychological level of $2,900.
In case gold returns above 2,900, it will be seen as an opportunity to resume buying and we can expect it to reach the 21 SMA (2,921) and could even reach 7/8 Murray at 2,939.
On the contrary, if the instrument falls below 2,876, we could expect a further bearish movement. So, the price could reach 5/8 Murray located at 2,851, and it could even reach the 200 EMA located at 2,843.
Technically, we see that the eagle indicator is reaching oversold levels on the H4 chart. Hence, the price of gold will likely return to trading around the psychological level of $2,900 in the next few days.
