Early in the European session, gold (XAU/USD) is trading around 1945.88, consolidating around this area, having reached a high of 1,948.98 yesterday in the American session.
Macroeconomic data from the United States was negative for the US dollar which weakened Treasury yield bonds and, in turn, was seen as an opportunity to buy gold as a safe-haven asset.
Investors are waiting for the Non-Farm Payrolls data to be released on Friday. Meanwhile, we expect gold to consolidate below 5/8 and above 4/8 Murray in the coming hours. We expect range trading which could be seen as an opportunity to sell below 1,947-1,953 (5/8 Murray) and buy above 1,937 (4/8 Murray).
According to the H-1 chart, we can see that gold is moving within an uptrend channel formed since August 24. We could expect that it will continue to rise in the next few hours and could reach the top of the uptrend channel around 1,953.
If XAU/USD reaches the resistance zone of 1,950 to 1,953, this could be seen as an opportunity to sell, since the Eagle indicator is in the overbought zone. From that resistance level, we could sell with the target at 1,923.
On the other hand, we expect a technical correction of the XAU/USD pair in the next few hours. In case gold breaks and trades below the 21 SMA located at 1,943, we could expect a bearish correction and the price could reach 4/8 Murray at 1,937. If bearish pressure prevails, we could see a fall until the price reaches the 200 EMA located at 1,920.
Given that XAU/USD is technically in an overbought zone, we can see a consolidation and we could expect a technical correction to occur. Therefore, as long as the metal is trading below 1,953, it will be seen as a clear signal to sell with the target at 1,920.