In the early European session, gold (XAU/USD) is trading around 2,026.66 within the uptrend channel formed on December 15, above the 21 SMA and 200 EMA.
On the H1 chart, the asset's upside potential seems to be exhausted. In case the price closes below 2,020, gold could suffer losses, sliding to 2,007, the lower boundary of the descending channel, or even the 4/8 Murray around the psychological level of $2,000.
According to the daily chart, gold is in a neutral-to-bullish trend. It is trading just above the 21 SMA, which indicates a potential rally in the short term. This moving average lies near 2,018, which suggests a continued advance provided that gold stays firm above this level in the coming days.
On the other hand, if the price falls below the key level of 2,018, gold could extend weakness, heading for the psychological level of $2,000 and even the 200 EMA located at the 1,937 mark on the daily chart.
According to the Fibonacci levels, gold reached the 38.2% level as part of a technical correction from the high of 2,145 to the low of 1,972. This could be a sign of a continued downtrend. So, if the price dips below 2,015, the downtrend will resume, with gold diving to the psychological level of $1,900 shortly.
Thus, our trading plan for the next few hours is to go short below 2,024, or below 2,020 in case of a breakout of the ascending channel. The levels of 2,015, 2,007, and 2,000 can be seen as targets. The eagle indicator has been giving a negative signal since December 15, which confirms our bear case scenario.