Early in the Asian session, Gold (XAUUSD) was trading around 1,855.52, below the downtrend channel which has been going on since early February. We can see that the price is consolidating. This is a sign that a strong move could occur ahead of fundamental news.
Since last, week gold has been consolidating around the area of 1,850. According to the 4-hour chart, we can see that it is oversold and a technical bounce above this level is likely. In case this scenario comes true, it could give us the opportunity to buy, waiting for gold to return to levels of the 200 EMA located at 1,876.
This apparent calm in the market is due to investors awaiting the inflation data report to be released during today's American session.
The annual CPI rate above 6.2% is bullish for the US dollar and this could put pressure on gold. The metal could quickly fall to support levels of 1,817 and the psychological level of 1,800.
On the contrary, in case the inflation data comes in below the consensus, gold could recover and quickly reach levels of the 21 SMA and the 200 EMA and finally reach the psychological level of 1,900.
A sharp break above 4/8 Murray located at 1,875 could provide gold with an opportunity to recover in the short term and it could reach 5/8 Murray located at 1,906. Conversely, a sharp break below 3/8 Murray could accelerate the bearish movement and the price could reach the 200 EMA on the daily chart located at 1,799 or 2/8 Murray located at 1,812.
Our trading plan for the next few hours is to buy gold, only if it consolidates above the daily pivot point located at 1,856 with targets at 1,870 and 1,875. The eagle indicator is in the oversold zone, hence, an imminent bounce is likely to happen in the next few hours.
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