FX.co ★ Strategy of the day on GOLD

Gold approaches the upper limit of its medium term bearish channel at 1.402 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.

Technical indicators do not provide clear signals but 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, so we recommend 2 scenarios: The first one is the hypothesis of a decline - then we recommend a sell on the level of 1.402 with the 1st objective at 1.392 and then at 1.390 A break through 1.405 will invalidate this scenario. The second scenario is a break of its resistance - then we recommend a “buy stop” that means to buy gold as soon as it has broken through its resistance of 1.402 with the 1st objective at 1.412 and then at 1.415. A break through 1.399 will invalidate this scenario.