FX.co ★ Strategy of the day on gold

Gold approaches the upper limit of its medium-term bullish channel at 1,490 suggesting a decline. However, a break of this level will initiate a more violent bullish channel.
Technical indicators provide sell signals, but until the resistance is not broken the assumption of a decline is most likely. Bollinger bands are much discarded as a result of a strong increase these days. Stabilization is expected in the short term.
Gold is currently testing 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 1,490 with the 1st objective at 1,480 and then at 1,477. A breakthrough of 1,493 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 1,490 with the 1st objective at 1,500 and then at 1,503. A breakthrough of 1,487 will invalidate this scenario.