Gold is trading around 2,647 with a strong bullish movement. Following the US inflation data released yesterday, gold started a strong technical rebound above 2,602 and is now approaching the strong resistance of 2/8 Murray around 2,656.
Technically, on the H1 chart, gold is overbought. Therefore, a technical correction is likely to unfold in the next few hours. So, the price could reach the level of 2,634.
Gold has strong resistance around 2,652-2,656, the area that coincides with the weekly pivot point. In turn, there is another resistance around 2/8 of Murray, which could stop the upward movement and gold could fall and reach 2,637 in the next few hours. Moreover, it could even return to levels of 2,620.
On the other hand, if gold consolidates above 2,656, our bearish outlook would be invalidated and we could expect gold to reach 2,685 and even 3/8 of Murray at 2,735 in the next few days.
According to the eagle indicator on the H1 chart, we observe that gold has reached the overbought zone, so we will look for opportunities to sell below 2,656 or 2,652.