Early in the European session, Gold (XAU/USD) is trading around 1,841.25 above the 21 SMA and just below the top of the downtrend channel which has been underway since February 2.
Gold has been consolidating below the 3/8 Murray yesterday, there was no volatility or any compelling moves because US markets were closed for the President's Day holiday.
On Friday of last week, gold managed to bounce from the area of 1,818. This level coincided with the bottom of the downtrend channel. Since then, the instrument has been trading in anticipation of fundamental data that could give it another bullish push and continue rising until it reaches the 200 EMA located at 1,865 and up to 4/8 Murray at 1,875.
In case gold breaks the downtrend channel sharply, we could expect it to carry out a new bullish sequence and it could reach 1,875 and could even reach the psychological level of 1,900.
The pivot point for today is located at 1,830. The price of gold is located above the 21 SMA. In case it consolidates above this level, there is a probability that it can continue to rise and offer an opportunity to buy.
Alternatively, in case gold falls below 1,830, it could be a signal to sell, with targets at 1,417 and 2/8 Murray located at 1,812. The eagle indicator has been testing a strong resistance line. If the price fails to break above, we could expect a lower volume and it will be seen as a sell signal.
Our trading plan for the next few hours is to buy if there is a sharp break above 1,847 or sell below 1,835.