FX.co ★ Gold wave analysis for January 29, 2013

Gold Elliott Wave
Since our last analysis gold was trading upwards just like we expected. Corrective (B) wave coloured green of the bigger (Y) wave coloured red was developing. Yesterday during the early Asian session we could observe descending movement towards the 1,651.91 level, and we can consider this move as the end of the 5 impulsive wave coloured blue of the bigger (A) wave coloured green. Therefore, during the European and New York sessions this commodity did not manage to hold this level and the price started pushing higher reaching the 1,662.36 level. At the moment, Gold is testing the 1,664.70 level, and we are expecting to see the price higher today before the final (C) wave starts. In accordance with our wave rules and taking into account that the wave C should retrace 100% of the wave A, we can define the potential targets with measuring wave A with take profit at 1,629.66 (100% of wave A). To reduce the risk, we can use resistance at the 1,680.00 level as stop loss.

Support and resistance
(S3) 1,638.5 (S2) 1,644.8 (S1) 1,649.1 (PP) 1,655.4 (R1) 1,659.7 (R2) 1,666.0 (R3) 1,670.3

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at the level of 1,674.44 with stop loss at 1,680.00 and take profit at 1,629.66 are recommended.