Early in the American session, gold is trading around 2,739 or with a strong bearish correction after having reached a high of 2,758 during the European session.

XAU/USD could find a good bounce if the price approaches the bottom of the uptrend channel forming since October 9th. This level coincides with the 21 SMA which could offer an opportunity to resume buying.

This correction from 2,758 to 2,717, approximately almost $40 in price, could be seen as a signal for a technical bounce. So, we can plan long positions above 2,710 (S_2) where the two-day support is located, which could offer a good point to buy.

If gold breaks and consolidates below the uptrend channel and consolidates below 2,732, the outlook could be negative in the short term. Therefore, we could expect the metal to drop to 2/8 Murray at 2,656 and finally, it could decline to the 200 EMA around 2,632.

However, we see S_2 support around 2,710 on the H4 chart. This level could offer a buying opportunity for gold which could be implemented during a technical bounce.