Gold, as we mentioned yesterday in our analysis, took a break from its strong rally after reaching strong resistance and overbought levels. After a technical correction below 3,437, gold declined very quickly, reaching the 3,380 level.
After reaching the 8/8 Murray around 3,437, gold was unable to sustain above this area, which led to a sharp technical correction during yesterday's American session. It is now likely to continue falling in the coming days, reaching the 6/8 Murray at 3,359 and possibly even reaching the 200 EMA around 3,342.
The Eagle indicator is signaling a negative sequence, so we believe that any technical rebound, as long as the price trades below the 8/8 Murray level, will be seen as a signal to sell.
Good support for gold could be found around 3,359 or 3,342; both levels could offer bulls a buying opportunity.
In the short term, gold is likely to reach $3,300, as the chart technically shows strong overbought conditions.
