FX.co ★ Gold Wave analysis for August 6, 2014

Gold price remains inside the downward sloping wedge. The trend still favors bears but we are very close to getting a buy signal if resistance at $1,301 is broken. The downward move from $1,346 is either the start of a new downward wave that will eventually break below $1,240 or as an alternative wave count it is wave B that has bottomed at the 61.8% retracement.

Price is above the short-term support of $1,280 and below the Ichimoku cloud resistance at $1,301. As long as price is below the Ichimoku cloud, I prefer the bearish scenario that sees wave E completed at $1,346. Breaking above $1,301 will cancel this scenario and will increase the chances of a move towards $1,350.

In the daily chart Gold price has entered the Ichimoku cloud once again. This makes daily trend neutral. A daily close below $1,280 will change it to bearish. A daily close above $1,300 will change it to bullish. Next important support level is at $1,270.