Early in the American session, gold is trading around 2,617, above the 21SMA, and below the downtrend channel forming since December 11. If gold consolidates above 2,625 in the next few hours, the outlook could be positive and we could expect the price to reach 2,656.
On the contrary, in case gold falls below 2,617 and consolidates below 2,614, we could expect a further bearish movement. Thus, the metal could reach 2,578 and could even cover the gap it left around 2,562.
The key level to pay attention to is 2,617. Above this area, gold is expected to continue strengthening but below we could expect a bearish phase.
Technically gold is within a downtrend channel, showing oversold signals on the H4 chart. A consolidation above 2,630 could encourage a bullish momentum that could push the price up to the psychological level of 2,700
The eagle indicator is showing an oversold signal, so we believe that we could expect a recovery in gold in the next few days.
The material has been provided by InstaForex Company - www.instaforex.com
