Early in the American session, gold (XAU/USD) is trading around 1,980.62 above the 21 SMA, slightly breaking the symmetrical triangle formed since December 11. On the H1 chart, we can see that gold has started a strong technical rebound from 1,973. The metal is likely to continue rising in the coming hours only if it consolidates above 1,980.
The pivot point is located around 1,985. If gold manages to consolidate above this area in the next few hours, it could be a signal for a further rise in the next few days. The price could reach the psychological level of $2,000 and even the 200 EMA located at 2,007.
On the H4 chart, gold is oversold. A daily close above 1,980 could be seen as a buying opportunity. Gold will likely return to the psychological level of $2,000 and could even reach the weekly resistance at 2,031.
On the other hand, if gold falls around 1,975, this could be a signal to resume selling, but most likely gold will continue to bounce in the coming days because there is an exhaustion of bearish strength.
Our trading plan for the next few hours is to buy gold above 1,980 with targets at 1,992, $2,000, and 2,007 (200 EMA). The eagle indicator is giving a positive signal which supports our bullish strategy.