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05.02.2024 05:05 PM
Early in the American session, gold is trading around 2,018.78, below the 21 SMA, and below the 200 EMA with a strong bearish signal after having broken 3/8 Murray located at 2,031.
Last week, we observed that gold had left a GAP at about 2,018. Since then, the metal has been strongly overbought according to the eagle indicator. As we indicated in our previous analyzes, this gap should be covered. Since January 26, gold has been strongly overbought. Therefore, a technical correction was imminent, as occurred today in the American session.
Gold has strong support at 2,015. This level has become a strong bottom for gold since the beginning of February and allowed it to make a technical rebound. In the next few hours, if gold consolidates above this area, we could expect it to return to the resistance level of 2,030.
In case XAU/USD breaks sharply 2,015, we could expect the price to reach 2009. This level also gave gold a chance to reach 2,062 on January 24th. If this scenario occurs, we could expect a technical bounce around this level which could be seen as a buying opportunity.
Gold is getting relief from the strongly overbought marker. In case it finds good support around 2,015 or 2,009, both levels could serve as a signal to buy in the short term with the target around the 200 EMA at 2,030.
In case gold makes a pullback towards the strong resistance at 2,031 and fails to break it, it could be seen as a signal to sell as this level has now become strong resistance and gold could resume its bearish cycle.
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