FX.co ★ Strategy of the day on GOLD

Gold is currently testing the intermediate support of its medium-term bearish channel at 1,583 suggesting a rebound. However, a break of this level will free a large potential and reach the lower limit of its channel at 1,560.
Technical indicators do not provide clear signals, but until the support is not broken the assumption of a rebound 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 support 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 1,583 with the 1st objective at 1,593 and then at 1,595. A breakthrough of 1,580 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 1,583 with the 1st objective at 1,573 and then at 1,570. A breakthrough of 1,586 will invalidate this scenario.