FX.co ★ Gold Elliott wave analysis for August 16, 2013

Yesterday, gold back tested the broken downward sloping trendline and exploded upwards making a higher high above 1,351 resistance. This gives bulls hopes for an extended upward run up to 1,380-90 and why not higher. The rising pattern canceled all bearish scenarios as resistances were broken. As mentioned in previous posts, 1,351 is important resistance and if broken prices would start a move towards 1,380-90. Support levels at 1,315 and 1,300 were held and our positions were stop reversed at the 1,351 resistance.

The short-term support is now found at 1,333 and then at 1,322. The short-term resistance is found at 1,380-90 area. We might se a small pull back towards 1,350 but it is not necessary in order for this upward move to continue.

The entire move from 1,180 to 1,365 could be counted as an upward 5 wave move but one that is not complete yet. The latest upward wave 5 from 1,270 is only half way complete and that is why we target near 1,400 for completion of the move. The wave formation is not perfect as wave 4 is much bigger than wave 2, but no elliott rule is broken so we keep things simple for now. We are mildly bullish targeting 1,380-90 and with 1,320 stop.