FX.co ★ Strategy of the day on the GOLD

Gold is currently testing the upper limit of its medium-term bearish channel at 1,604 suggesting a decline. However, a break of this level will initiate a violent bullish channel.
Technical indicators provide sell signals, but the rate approaches overbuy zone and 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 increase these days. Stabilization is expected in the short term.
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 1,604 with the 1st objective at 1,594 and then at 1,590. A breakthrough of 1,607 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means to buy gold as soon as it is broken through its resistance of 1,604 with the 1st objective at 1,614 and then at 1,617. A breakthrough of 1,601 will invalidate this scenario.