Gold is bouncing back after reaching the support of the uptrend channel formed on September 26th and is now likely to reach the 3,977 area. If the price breaks this high, we could expect it to reach 3,992 and could even reach the psychological level of $4,000.
Conversely, if the gold price falls below 3,951, this could signal a breakout of the uptrend channel, and we could expect a strong technical correction that could push the price down to the +1/8 Murray around 3,906.
If gold reaches 3,977 and fails to consolidate above this area, we could expect the formation of a double top or triple top pattern, which could confirm a short-term technical reversal.
We should pay attention to the 3,950 area. A strong technical correction is expected below this area. The uptrend could develpo further above this level.
The eagle indicator is reaching overbought levels, so gold is expected to undergo a significant technical correction in the coming days.
