Early in the American session, gold is trading around 2,179.20, below the 6/8 Murray, and above the 21 SMA. Gold is strongly overbought and the latest trading shows an exhaustion of bullish strength which is a sign that the instrument could fall, only in case it continues trading below 2,187.
In the H4 chart, we can see that in the last few negotiations, gold has been hovering around 2,187, which has become a strong resistance to gold. If it trades below 6/8 Murray in the next few hours, this will be seen as a signal to sell with the target at 2,169 and eventually, at the bottom of the uptrend channel around 2,140.
If gold consolidates above 2,190, we should avoid any bearish strategy and in turn, expect gold to reach 7/8 Murray at 2,218.
However, for several days gold has been strongly overbought. If it falls below 2,187 in the next few hours, it could moderate the bullish pressure. In turn, we could expect a sharp fall so that the price could reach 4/8 of Murray around 2,125.
Our trading plan will be to sell below 2,187. Any technical bounce will be seen as an opportunity to sell with a stop loss above the all-time high. Technically, we believe that there could be a decline in the price in the next few days or hours.
