Gold is overperforming the last couple of sessions on the 4-hour chart, advancing above the short-term downward sloping channel and the 20- and the 50-period simple moving averages (SMAs). The RSI is moving higher above the 50 level, while the stochastic remains in the overbought territory, indicating a possible overstretched market.
Should the metal manage to gather more upside momentum, the next resistance could come around 1,847. A break above this level would shift the bias to a more bullish one and open the way towards the 1,870 barrier and the 200-period SMA at 1,882.
However, if the price is unable to remain above the descending channel, the risk would shift back to the downside, with the next support coming from the 1,820 barrier, which coincides with the 20-period SMA. A drop lower would signal a resumption of the downtrend, meeting 1,804 and 1,795.
In a nutshell, the yellow metal is showing some strength after the bounce off 1,804 and any moves above the 200-period SMA could confirm the bullish correction.
