XAU/USD came under bearish pressure after falling below the 200 EMA (1,849) and ended the American session reaching a low of 1808.93

In less than 24 hours from the high of 1878.74 to the low of 1808.93, gold fell by approximately $70. This is a sign that risk aversion is increasing and investors will continue to take refuge in the US dollar.

Investors are worried that the Fed may hike the interest rate by 0.75%. As a result, the stock markets declined along with gold and cryptocurrencies.

A technical rebound is expected in the next few hours as gold is in an oversold zone. However, as long as it fails to consolidate above the 200 EMA located at 1,849, it will only be a pullback to resume the downtrend correction.

In the early Asian session, XAU/USD is trading at 1,824 and after having found a strong bounce above 2/8 Murray. The technical bounce is likely to continue in the next few hours and may reach the 21 SMA around 1,838.

In case of a test of the level of 2/8 Murray, gold is likely to return to the zone of 1,812. We should wait for a consolidation above this level to buy with targets at 1,830, and 1,838. It could reach the 200 EMA at 1,849.

In the Asian session, the eagle indicator touched the oversold zone. It means that a technical rebound will occur in the next few hours. it may be an opportunity to buy above 1,812.

On the contrary, if gold resumes its downtrend and trades below 1,812 it could continue its downward movement and could reach the psychological level of 1,800 and the low of May 16 at 1786.70

Our trading plan for the next few hours is to buy gold at current price levels around 1,824 or in case of a bounce at 1,812 to buy with targets at 1,838 and 1,849.