Early in the American session, XAU/USD is trading at 2,656, around 6/8 Murray, and within the bullish trend channel forming on the H4 hour chart since September 17. During the Asian session, gold reached the high of 2,670. Since then, it has been consolidating. This is likely to be the technical correction so that the metal could reach 2,632.

On the other hand, if gold consolidates above 2,656, it could resume its bullish cycle and could reach 2,670. Eventually, gold could even reach the daily R2 around 2,690.

Given that gold is overbought according to the H4 chart, we could expect a strong technical correction to occur in the next few hours, so we will look for opportunities to sell below 2,656.

Additionally, if the bearish force prevails and if the gold price consolidates below 2,632 (21 SMA), we could expect it to reach the 200 EMA around 2,530 in the short term.