Early in the European session, gold (XAU/USD) is trading around 1,933.06 at 61.8% Fibonacci, as a result of the high of 1,953 and the low of 1,900.
We can see that gold is showing signs of exhaustion and XAU is likely to consolidate in the coming days until the market receives the news from the Federal Reserve.
The market consensus is that the United States interest rate remains at 5.50%, so significant changes are expected. If the data remains within the forecast, we could expect the dollar to strengthen and this could weaken gold so that it could fall towards support levels of 1,921 (200 EMA).
According to the H-1 chart, we can see that gold is trading within an uptrend channel formed since September 14 and is now showing signs of being overbought. In the next few hours, a technical correction is expected to occur only if the XAU/USD pair trades below 61.8% Fibonacci or below 4/8 Murray.
In case of a bearish scenario for the next few hours, we could wait for a signal to sell below 1,937 or around 1933, with targets at 1,926 and 1,921. On the other hand, in case a pullback occurs towards 4/8 Murray, this could be seen as an opportunity to sell with targets at 1,921 and the price could even fall towards 2/8 Murray located in 1,906.
The eagle indicator is therefore giving a signal of extreme overbought conditions. The key will be to watch if a bullish move occurs and gold trades below 1,937, then it could be seen as a negative signal and an opportunity to sell.