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Gold is currently testing the upper limit of its medium-term bearish channel at 1,782 suggesting a decline. However, a break of these levels will reach the upper limit of its channel at 1,797.
Technical indicators provide buy signals but approach overbuy zone and until the resistance is not broken, the assumption of a decline is most likely. Bollinger bands have stabilized showing a more regular volatility. Furthermore, the superior band strengthens the intermediate resistance of its channel supporting the hypothesis of a violent movement in case of failure.
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 at the level of 1,782 with the 1st objective at 1,772 and then at 1,770. A break through 1,785 will invalidate this scenario. The second scenario is a break of its resistance where we advise a “buy stop” which means buying the spot rate as soon as it is broken through its resistance of 1,782 with the 1st objective at 1,792 and then at 1,797. A breakthrough of 1,779 will invalidate this scenario.
