FX.co ★ Strategy of the day on the GOLD

Gold is currently testing the upper limit of its medium-term bearish channel at 1,681 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide buy 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 approaches 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 1,681 with the 1st objective at 1,670 and then at 1,667. A breakthrough of 1,684 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 1,681 with the 1st objective at 1,692 and then at 1,695. A breakthrough of 1,678 will invalidate this scenario.