Gold approaches the upper limit of its medium-term bearish channel at 1,719 suggesting a decline. However, a break of these levels will initiate a violent bullish channel.
Technical indicators provide sell signals, and until the resistance is not broken the assumption of a decline is most likely. Bollinger bands have greatly tightened in the recent days showing a decline in volatility and the imminence of a violent movement.
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 1,719 with the 1st objective at 1,708 and then at 1,705. A breakthrough of 1,722 will invalidate this scenario. The second scenario is a break of its resistance where we advises a “buy stop” that’s means to buy gold as soon as it is broken through its resistance of 1,719 with the 1st objective at 1,729 and then at 1,733. A breakthrough of 1,716 will invalidate this scenario.