Strategy of the day on GOLD
Gold approaches the lower limit of its medium-term bearish channel at 1,548 suggesting a rebound. However, a break of this level will free a large potential and initiate a more violent bearish channel.
Technical indicators provide sell signals, but until the support is not broken the assumption of a rebound is most likely. Bollinger bands are much discarded as a result of a strong decline these days. Stabilization is expected in the short term.
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 on the level of 1,548 with the 1st objective at 1,558 and then at 1,560. A breakthrough of 1,545 will invalidate this scenario. The second scenario is a break of its support where we advise a “sell stop” which means to sell gold as soon as it is broken through its support of 1,548 with the 1st objective at 1,538 and then at 1,535. A breakthrough of 1,551 will invalidate this scenario.
The material has been provided by InstaForex Company – www.instaforex.com