Early European session Gold, (XAU/USD) is trading around 2,022.79, above the 21 SMA, and below +1/8 Murray. Gold is showing signs of exhaustion but could continue to rise until the price reaches the top of the uptrend channel around 2,032.
Yesterday, gold rose due to the weakness of the dollar and hit a high at 2,024.87.
US Treasury yields fell amid signs of a slowdown in the labor market. The yield of 10-year Treasuries printed a low of 3.3370%. Currently, they are bouncing. As long as yields settle above this low, gold could technically correct in the next few hours.
Since March 15, gold has been trading within an uptrend channel and is likely to enter an overbought zone as soon as it climbs to 2,025-2,032. Hence, we could expect a technical correction in the coming days.
According to the 4-hour chart, gold has upside potential but on the 1-hour chart, it is showing overbought signs. The price is likely to break below 2,019, so we could expect a technical correction towards the daily pivot point located at 2,007.
In case of a pullback to +1/8 Murray around 2,031, this could be seen as an opportunity to sell with targets at 2,007 (daily pivot point), 2,000 (8/8 Murray), and finally down to the 21 SMA at 1,984.
A daily close above 2,032 could mean a new bullish sequence and gold could reach a one-year high at about 2,075. On the other hand, a sharp break below the psychological level of $2,000 could accelerate the technical correction and the instrument could reach the 200 EMA located at 1,922.