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Gold approaches to the lower limit of its medium-term bullish channel at 1,767 suggesting a rebound. However, a break of these levels will free a large potential and initiate a violent bearish channel.
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 stabilized showing a more regular volatility. Furthermore, the inferior band strengthens the lower limit of its channel supporting the hypothesis of a rebound.
Gold is currently testing the lower limit of its channel, we suggest 2 scenarios: the first one is the hypothesis of a rebound where we recommend a buy at the level of 1,767 with the 1st objective at 1,778 and then at 1,782. A breakthrough of 1,764 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means selling gold as soon as it is broken through its support of 1,767 with the 1st objective at 1,755 and then at 1,753. A breakthrough of 1,770 will invalidate this scenario.
