FX.co ★ Strategy of the day on the GOLD

Gold approaches the lower limit of its medium-term bullish channel at 1,664 suggesting a rebound. However, a break of these levels will free a large potential and initiate a violent bearish channel.
Technical indicators provide buy signals and until the support is not broken the assumption of a rebound is most likely. Bollinger bands have stabilized showing a more regular volatility.
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 on the level of 1,664 with the 1st objective at 1,674 and then at 1,677. A breakthrough of 1,661 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell gold as soon as it is broken through its support of 1,664 with the 1st objective at 1,654 and then at 1,651. A breakthrough of 1,667 will invalidate this scenario.