Early in the American session, gold is trading around 2,392, showing signs of exhaustion and retreating after having reached the psychological level of 2,400. According to the H4 chart, gold has been trading within the bearish trend channel forming since July 17th. A technical correction is likely to occur in the next few hours if the price consolidates below 2,402.
In the chart above, we can see that gold is above the 200 EMA and above the 21 SMA, which is why the bullish sentiment prevails. However, it lacks the bullish momentum to continue rising. It would mean that a technical correction could occur in the next few hours and then, gold could resume its bullish cycle.
If gold falls and consolidates around 6/8 Murray at about 2,375 in the next few hours, we could look for opportunities to buy with targets at 2,392 and 2,435.
Conversely, a close below 2,370 on the H4 chart would invalidate the bullish outlook and gold could fall towards last week's low at 2,350 and could even reach 2,312 (5/8 Murray).
