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Early in the US session, Gold (XAU/UD) is trading around 1,991.06, rebounding after hitting a low at 1,976.13. We expect gold to consolidate above 1,990 in the next few hours and the instrument could reach the psychological level of 2,000. Finally, it could reach the strong resistance of 2,011, which has been rejected three times.
Furthermore, if the bullish force prevails, after a sharp break and a daily close above 2,012, we could expect the metal to continue rising and cover the gap it left at 2,023. Eventually, the price could climb to + 1/8 Murray at 2,031.
According to the 4-hour chart, gold has strong support around the 7/8 Murray around the 200 EMA. In case gold falls into this area, we could expect a strong technical bounce and the instrument could resume its bullish cycle.
On the other hand, in case gold consolidates above 2,012, it is expected to reach 2,031 in the next few days and could exceed its high at the level of 2,062.50 (+2/8 Murray).
The eagle indicator entered the extremely oversold zone on April 24. Hence, a technical correction is likely to unfold until support levels in gold. This move could be seen as an opportunity to buy.
Our trading plan for the next few hours is to buy gold above the 21 SMA with targets at 2,000 and 2,012. Below 1,984, a bearish acceleration of the XAU/USD pair could occur due to the fact that the daily pivot point is located there, which could exert pressure and the price could fall towards 1,975 and 1,968 (7/8 Murray).
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