From the high of 2,070.40 and the low of 1,889.98, gold (XAU/USD) has retraced to reach the 50% Fibonacci.
According to the daily chart, gold is trading above the 21 SMA located at 1,941 and above 200 EMA located at 1,850.
This gives gold a bullish outlook and it is likely to continue its uptrend until in the coming days, reaching the 61.8% Fibonacci retracement around the psychological level of $2,000.
Yesterday the data that gave volatility to the market was the ECB policy decision which disappointed those who were looking for aggressive clues. The Executive Board left the current policy unchanged, without indicating any need to speed up the rate of adjustment.
This outcome limited the strength of gold and we saw a correction towards the 38.2% Fibonacci. Then, the price bounced back and closed around 1,973.
The next week will be decisive for gold. The price is expected to continue the upward movement towards 8/8 Murray located at $2,000. A daily close above this zone could accelerate the bullish movement and the price could reach +1/8 Murray around 2,062.
On the other hand, yesterday the US currency (USDX) extended its positive momentum reaching a high at 100.74, a level that was last seen on May 2020. The dollar looks overbought and a technical correction is likely next week which could favor gold.
According to the daily chart, the intraday decline looks corrective after the metal advanced for six straight days. Therefore, any setback towards 1,960 or 1,941 will be an opportunity to buy gold in the coming days.