Early in the American session, gold (XAU/USD) is trading above the 200 EMA located at 1,940. During the Asian and European session, it was making a technical correction because it was located inside a downtrend channel formed when it reached the zone of 2,000 on April 13.
XAU/USD is trading around the daily low of 1,937 with a negative bias, but with strong support at 7/8 Murray and the 200 EMA.
Gold price (XAU/USD) stopped the corrective pullback from near the $2,000 psychological level and attracted some buying near the area 1,940. A technical correction towards 1,915 and 1,985 could follow. This may occur only if the break of 1,937 is confirmed.
Yesterday, gold bounced above the zone 1,940 and reached the level 1,957. If gold consolidates above 1,937, it could form a double bottom which would be a positive sign and the price could reach the 21 SMA zone located at 1,962 in the next few days.
Conversely, a break below the 200 EMA and a breakout of the uptrend channel could accelerate the bearish move towards key support at 1,915 and the price could even drop to 6/8 Murray at 1,875. A close below 1,935, on the daily chart could confirm the bearish movement of gold.
To the upside, now 1,949 is the first resistance, followed by the area 1,962. If there is a consolidation above the 21 SMA, the metal could resume its upward movement and reach 1,980 and even 8/8 Murray at the psychological level of 2,000.
The eagle indicator is giving a negative signal. A technical bounce is likely to be seen as an opportunity to continue selling gold. It would be wise to wait for the 21 SMA around 1,962. It would be an opportunity to sell with targets at 1,940 and 1,915.