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After gold bounced off towards the intermediate support of its medium term bearish channel at 1.585, the yellow metal have approached to the upper limit of it to 1.625. A breakthrough these levels will release good potential and initiate a violent bullish trend. However, as an outflow channel was not performed, the decline is most likely.
Technical indicators do not provide clears signals but approach overbuy zone supporting the assumption of a decline. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in a short term. However, the superior band strengthens the upper limit of the channel.
According to previous events, we recommend a "buy stop" and buy as soon as gold breaks through its resistance of 1.625 with the 1st objective at 1.635 and then at 1.640. A breakthrough 1.622 will invalidate this scenario.
