Early in the American session, gold is trading around the 21 SMA located at 2,758, below 7/8 of Murray, and within the uptrend channel forming since early January. Gold is showing signs of exhaustion. Therefore, a technical correction is likely to occur in the next few hours and the instrument could reach the bottom of the uptrend channel around 2,745.
In case gold breaks the bullish trend channel and consolidates below 2,734, the outlook could be negative and we could expect a bearish acceleration, with targets at 5/8 of Murray. The price could even reach the 200 EMA located at 2,692.
On the other hand, if gold consolidates above 2,765, the outlook could be positive, we could expect it to reach the area of 2,773 to 2,784, the key level where we could expect a double top formation.
The eagle indicator has been giving a negative signal since January 23. Hence, a technical correction is likely to occur in the next few days and we could expect it to reach $2,600.
Our trading plan for the next few hours is to sell below 2,758. In case a pullback towards 2,765 occurs, it will be also an excuse to sell.
