Early in the American session, gold is trading around 2,325 within the uptrend channel forming since June 7 and below the 200 EMA and 21 SMA. If gold rebounds and consolidates above 2,320 in the next few hours, the outlook could be positive and we could expect the instrument to reach strong resistance at 2,337.
Gold has been consolidating above the bottom of the uptrend channel but showing signs of exhaustion. In case of a sharp break of the uptrend channel and if gold trades below 2,320, we could expect a decline towards 5/8 Murray located at 2,312. The price could even reach 4/8 Murray at 2,250.
On the contrary, if gold consolidates above the 200 EMA located at 2,334 and even surpasses 2,337, it could be seen as a clear signal to buy with the target at about 6/8 Murray located at 2,375, a level that coincides with the top of the uptrend channel.
Given that the eagle indicator is showing overbought signals, we could expect a technical rebound. But if gold fails to consolidate above 2,340, it will be seen as an opportunity to resume selling.
