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Gold approaches the intermediate resistance of its medium-term bearish channel at 1,682. It seems that a decline was initiated. However, a break of these levels will free a large potential and reach the upper limit of its channel at 1,710.
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.
Gold is currently testing the intermediate resistance 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 1,682 with the 1st objective at 1,672 and then at 1,670. A breakthrough of 1,685 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 1,682 with the 1st objective at 1,692 and then at 1,695. A breakthrough of 1,679 will invalidate this scenario.
