FX.co ★ Gold Wave analysis for August 29, 2014

Gold price made another upward move yesterday towards the $1,295 resistance and got rejected. Today, there is a lot of selling pressures pushing price towards critical support of $1,280. Gold should bounce higher from the current levels above $1,295 soon, otherwise sellers will come back stronger.

In the 4 hour chart as shown above, Gold price has broken the short-term upward sloping red trend line. However, price is still inside the neutral area of the Ichimoku cloud. Gold price has started making higher highs and higher lows from $1,271. Breaking below the horizontal support at $1,280 will cancel this short-term bullish signal. Besides, price will have broken below Ichimoku cloud area.

In the daily chart, Gold price was rejected at the lower end of the Ichimoku cloud at $1,295. Price is below the cloud which is a bearish sign. However, as I have pointed out in previous posts, important long-term support is found at $1,270 where we saw a first initial bounce. Gold bulls will need to push price back inside the Ichimoku cloud. The longer price keeps below the cloud, the more chances there are of a sharp sell off towards $1,200.