Gold bounced upwards yesterday towards 1,296 after respecting thу support at 1,270. The 1,260-70 is very important support zone that is crucial for our bullish alternative wave scenario that we've been talking about for so long. We still prefer the bearish wave scenario as our primary choice and we still remain short with 1,320-30 stop. Yesterday's move was most probably just another corrective bounce as the price did not manage to move above 1,300.
The upward move from the lows is a three wave pattern and it could be already over. However, we could see continuation of the upward correction towards 1,300. As we see in the 1 hour chart above, the downward move is taking place within a downward sloping channel and since the trend remains down so do we remain short. Breaking out and above the channel will be a bullish sign but an alert for bears.
The longer-term trend remains downward as shown in the daily chart above. This chart confirms our view that the upward correction from 1,180 is over and we should expect a down move towards 1,100. We remain short as long as the price in the daily levels stays inside the green downward sloping channel. Resistance at 1,300 could be crucial for the short-term trend. A rebond from that level will push the price back down towards 1,270. Breaking above it could push the price towards 1,320 to test crucial resistance levels.
Concluding, today we expect to see weakness below 1,300 and if the price breaks below 1,282 we will most probably test 1,266 and 1,254 support levels. Resistance is found at 1,294, 1,301 and 1,310.
