FX.co ★ GOLD Intraday Technical Analysis

After a violent bullish acceleration, gold has tested the upper limit of its medium term bullish channel and declined to the lower limit of its channel at 1,688 suggesting rebound. However, a break of these levels will release good potential and initiate a bearish channel.

Technical indicators provide buy signals and approach oversell zone supporting the assumption of a rebound. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in a short-term. Furthermore, the inferior band strengthens the lower limit of its channel supporting the hypothesis of a rebound.

As gold is currently testing the lower limit of its channel, we suggest 2 scenarios: the first one is the hypothesis of a rebound where we recommend a buy at the level of 1,688 with the 1st objective at 1,699 and then at 1,705. A breakthrough of 1,685 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means selling gold as soon as it is broken through its support of 1,688 with the 1st objective at 1,678 and then at 1,675. A breakthrough of 1,691 will invalidate this scenario.