FX.co ★ Strategy of the day on GOLD

Gold approaches the upper limit of its medium-term bearish channel at 1,584 suggesting a decline. However, a break of this level will initiate a violent bullish channel.
Technical indicators do not provide clear signals and until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility.
Gold is currently testing the upper limit of its channel, we suggest 2 scenarios. The first one is the hypothesis of a decline where we recommend a sell on the level of 1,584 with the 1st objective at 1,574 and then at 1,572. A breakthrough of 1,587 will invalidate this scenario. The second scenario is a break of its resistance where we recommend a “buy stop” which means to buy gold as soon as it is broken through its resistance of 1,584 with the 1st objective at 1,594 and then at 1,596. A breakthrough of 1,581 will invalidate this scenario.