Early in the European session, gold is trading around 2,069.45 within the trend channel formed since December 15 and above the 21 SMA.
On the H4 chart, we can see that the XAU/USD pair made a strong technical correction after reaching the top of the uptrend channel around 2,088.48. Currently, the instrument is bouncing above the bottom of the uptrend channel. If Gold consolidates above 2,070 in the next hours, we could expect a continuation of the upward movement and the price could reach 2,080 and even 2,088.
On the other hand, if gold falls below 2,062, breaks the uptrend channel, and consolidates below this area, it could be seen as a clear signal to sell for the next few days, with the target at the 200 EMA at 2,014. The imstrument could even reach 4/8 Murray which represents the psychological level of $2,000.
In the coming days, the low liquidity of the market will continue. Therefore, traders should be aware of unexpected movements in gold. For this, we must be very careful because unexpected movements might occur without any reason.
In the coming hours, the key would be to buy if gold settles above 2,062 or sell in case it falls below 2,060. The eagle indicator is giving a negative signal, so any technical bounce will be seen as a signal to sell.
