Gold is trading around $4,329, forming a double top pattern after reaching last week's high of around $4,350. Gold could undergo a technical correction in the coming days and could reach the bottom of the bullish downtrend channel around $4,160.
As long as the price remains below $4,350, it could be seen as an opportunity to open short positions with targets at $4,300 and the 21 SMA located at $4,270. Moreover, we could even expect gold to reach the strong support zone around $4,218.
On the contrary, if gold breaks decisively above $4,350, it will be exposed to strong resistance around $4,375, where the 8/8 Murray is located. This zone could be seen as a signal to enter short positions.
Gold is overbought as seen on the H4 chart, so at current price levels we could sell right now, with targets at $4,300 and $4,280.
The Eagle indicator is generating a negative signal, so our outlook will remain bearish for the coming days. The time is right to open short positions.
