Early in the American session, gold (XAU/USD) is trading around 1,935 approaching the top of the downtrend channel that has been formed since March 23.
On the 4-hour chart, we can see that gold has been consolidating for several days now above the 200 EMA and above the 21 SMA.
Gold has strong support at 1,915 and has repeatedly tested this level. The price has been bouncing to reach the zone of 1,937-1,945, forming a price range.
Given that there have been several attempts to break the strong resistance of 1,937, a consolidation on the 4-hour chart above this area could accelerate the bullish movement.
On codition of a daily close above 7/8 Murray (1,937), gold could reach the zone 1,965 and even the psychological level of 2,000 in the next few days.
The United Nations voted to suspend Russia from the UN Human Rights Council, following allegations of atrocities committed by Russian soldiers during the war in Ukraine.
The possibilities of a diplomatic solution to the conflict have diminished, due to the irreconcilable demands which weigh on the talks. The odds are that the attack will resume.
Such fundamental factors could benefit gold that will once again be the haven asset for investors in view of the increasing fear and risk in the equity market.
Our trading plan for the next few hours is to wait for a breakout and consolidation above 7/8 Murray around 1,937.
A close on 4-hour charts above this level will be an opportunity to buy with targets at 1,950 and 1,965. The price could even hit the psychological level of 2,000 next week. The eagle indicator is giving a positive signal which supports our bullish strategy.