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Gold is trading around 2166, bouncing after finding good support around 5/8 Murray. It could likely try to break the top of the downtrend channel around 2,170 in the next few hours. Then, we could expect there to be a bullish acceleration and the price could reach 2,187. Once above this level, it could reach 7/8 of Murray at 2,218.
If gold trades below 2,170 (21 SMA) in the next few hours, the outlook will remain negative and we could expect the metal to fall and bounce around 2,130. The instrument could even reach 4/8 Murray around 2,125. This last support could be a point key for gold and could allow bulls to resume buying.
Technically, gold has been trading above overbought levels since March 11. We now observe that the eagle indicator received relief from bullish pressure on the H4 chart. There will likely be a technical correction in the coming days that could be used as a signal to buy.
Should gold consolidate above 2,187, it could continue to rise next week and could reach the key level of 2,200.
On the contrary, if gold falls below 2,125 the outlook could be negative and the instrument could find strong support around the 200 EMA located at 2,084.
Our outlook for XAU/USD will be bearish as long as it consolidates below 6/8 Murray (2,187) in the short term or we expect it to reach 2,080.
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