12.08.201315:15 Forex Analysis & Reviews: Gold Elliott wave analysis for August 12, 2013

Gold prices broke above the resistace levels at $1,325.00 early Monday putting the bigger bearish picture in danger and changing momentum to upwards. The price managed to break resistance levels and the last stand for bears is the high at $1,349.00 to be tested. The current price actions favors bulls as the downward move from $1,349.00 to $1,270.00 was overlapping and not impulsive. On the other hand, the upward move from $1,270.00 to $1,330.00 looks impulsive and the alternative bullish scenario suddenly has increased chances of success since the high of wave 1 at $1,266.00 was not overlapped. Therefore, it is highly probable to see a new high towards $1,360.00-90.

Our bearish view will be canceled once the prices breaks $1,340.00-49. Until then we expect the price to get bouncing from $1,340.00-49 resistance area and pull back down towards $1,250.00. Initial selling signals will come if the price breaks below $1,313.00 and $1,303.00.

The longer-term picture in Gold also supports our view. The downward move we expect could come soon as the daily chart is just under the upper boundaries of the downward sloping channel. Short positions are favored once support at $1,314.00-$1,303.00 is broken. Stop for bears is at $1,349.00. A target is at $1,150.00. Breaking the MA at $1,282.00 will bring increased selling pressures that will confirm our bearish view.Until then we remain neutral as the price have a bullish momentum and is going to test $1,340.00-50 again.