Early in the American session, gold (XAU/USD) has reached the highest level since March 11th. It is currently trading at $1,997 around 8/8 Murray and around the psychological level of $2,000.
We can see on the 4-hour chart that gold is trading inside the uptrend channel that was formed since April 5th. It is likely that in the next few hours, the price could reach the top of this channel around $2,006.
Gold is up eight sessions from its last low at $1,915, so it is technically in a reversal zone and a strong technical correction is likely in the coming days.
The minor trend is also bullish. A close below the 21 SMA around $1,973 of the 4-hour chart will change the minor trend to the downside. This will also change the momentum and the price could reach the support at $1,960.
If gold fails to break the barrier of $2,000-2,006, the closest support is the level of $1,979 which represents the 50% Fibonacci and followed by the 38.2% at $1,958.
We can also see that the eagle indicator is touching the 95-point zone which represents extremely overbought levels. It is imminent that in the next few days there will be a technical correction of gold and it could reach the zone of $1,973 and even $1,958.
In case the price consolidates above the psychological level of $2,000 on the daily chart, it is expected to reach its next target at $2,024 and could even reach +1/8 of Murray at $2,065.
Our trading plan for the next few hours is to sell below $2,006 with targets at $1,973. The eagle indicator is giving an overbought signal supporting our bearish strategy.