Early in the American session, gold is trading around 2,464.35 within the uptrend channel formed on the H1 chart and showing upside potential but with resistance around 7/8 of Murray located at 2,468.
Gold could make a strong technical correction since it is overbought on the H4 chart. It is likely that if it consolidates below 2,460, the price could reach 6/8 Murray at 2,437.
On the other hand, if gold consolidates above 2,468, it could resume its bullish cycle and in the short term, it could reach the psychological level of $2,500, a level that coincides with 8/8 Murray. Technically, we could expect a correction in the next few days.
We should expect a break of the symmetrical triangle pattern. In case gold trades above 2,468, the bullish outlook will be confirmed.
On the contrary, if gold consolidates below 2,460, the bearish outlook will be confirmed. Therefore, the price could reach the 200 EMA located at 2,418 and even 5/8 of Murray at 2,406.
On the H1 chart, we can see the formation of a double top which is a sign of a trend reversal, but gold should confirm it with a break of the bullish trend channel. Therefore, a strong technical correction is likely to occur below 2,456.
