FX.co ★ Strategy of the day on the GOLD

Gold is currently testing the intermediate resistance of its medium term bearish channel at 1,635 suggesting a decline. However, a break of these levels will allow it to reach the upper limit of its channel at 1,645.

Technical indicators do not provide clear signals but until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in a short term.

As gold is currently testing the intermediate resistance of its channel, we recommend 2 scenarios: the first one is the hypothesis of a decline where we recommend a sell at the level of 1,635 with the 1st objective at 1,625 and then at 1,623. A break through 1,638 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means buying the gold as soon as it is broken through its resistance of 1,635 with the 1st objective at 1,645 and then at 1,648. A break through 1,632 will invalidate this scenario.