Early in the American session, Gold (XAU/USD) is trading around 2,679.26, within the uptrend channel and close to the historical highs reached about 2,685. A correction from these levels is imminent.
Technically, gold is overbought. Thus, a strong technical correction is expected to occur in the next few hours, with targets at 6/8 Murray and, if bearish force prevails, at 21 SMA located at 2,647.
On the other hand, if the metal continues to rise, we should expect it to consolidate above 2,685. Then, we could reach the top of the bullish trend channel around 2,706.
The key for the next few hours is to sell XAU/USD as the price could fall and make a strong technical correction. Since September 19, the chart has been showing a bearish divergence.
Our trading plan for the next few hours is to sell gold below 2,684 with targets at 2,670 and 2,656. If this last support is broken, the price of gold could reach 2,647 as the final target.
