Early in the American session, gold is trading around 2,860 within the downtrend channel forming since February 19. In the European session, gold reached the bottom of the downtrend channel around 2,851 and almost reached the 200 EMA.
During the American session yesterday, the metal started a strong technical correction and is now reaching oversold levels. A technical bounce will likely occur at about 2,844 or 2,851, and the price could reach 5/8 of Murray located at 2,890.
The eagle indicator reached the extremely oversold zone. So, we believe that we could expect a technical bounce in the next few days. If gold consolidates above 2,844, it will be seen as an opportunity to buy.
On the contrary, in case gold falls below the 200 EMA, it could remain under bearish pressure and is expected to reach the pivot point around 4/8 Murray located at 2,812.
Technically, we expect gold to recover its value in the next few hours or next week. It is expected to return to 2,890 or around the psychological level of 2,900. We are likely to look for buying opportunities above the current price levels.
