FX.co ★ Strategy of the day on GOLD

Gold is currently testing the intermediate support of its medium-term trading range at 1,562 suggesting a rebound. However, a break of this level will free a large potential and reach the lower limit of its channel at 1,550.
Technical indicators provide sell signals, but the rate evolves in oversell zone and until the support is not broken the assumption of a rebound is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in the short term.
Gold is currently testing the intermediate support of its trading range, we suggest 2 scenarios. The first one is the hypothesis of a rebound where we recommend a buy on the level of 1,562 with the 1st objective at 1,572 and then at 1,575. A breakthrough of 1,559 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 1,562 with the 1st objective at 1,552 and then at 1,550. A breakthrough of 1,565 will invalidate this scenario.