FX.co ★ GOLD Intraday Technical Analysis

Gold has tested the upper limit of its short term bearish channel for the 3 time and seems to initiate a decline. It approaches to the intermediate support of its channel at 1,662 suggesting a rebound. However, a break of these levels will result in a return to the lower limit of its channel at 1,652.
Technical indicators provide sell signals and until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have greatly tightened in recent days showing a decline in volatility and the imminence of a violent movement. Furthermore, the inferior band strengthens the intermediate support supporting the hypothesis of a rebound.

As gold tests its intermediate support, we recommend 2 scenarios: the first one is the hypothesis of a rebound where we suggest a buy at the level of 1,662 with the 1st objective at 1,675 and then at 1,680. A breakthrough of 1,659 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means selling the spot rate as soon as it is broken through its support of 1,662 with the 1st objective at 1,652 and then at 1,649. A breakthrough of 1,665 will invalidate this scenario.