Gold weakness is evident as even after 5 complete waves down, the prices only managed to stage a small upward bounce toward $1,257. Prices failed to break above the short term resistance trendline. Short-term resistance is found at $1,258 and short-term support - at $1,230. Pivot point for today is $1,248. Trading above that level will favor another test of $1,258. As long as prices trade below it, we should expect a retest of the lows.
Breaking below $1,240 level, will confirm bearish trend and prices will move towards $1,230 with increased chances of making new lows. Breaking above the red trendline resistance, will push prices towards the broken neckline at $1,260 and maybe toward $1,290 to end the upward correction.
The daily chart shows us that the prices continue to trade inside the downward sloping trend channel. Breaking above this blue downward sloping channel could push prices toward $1,290 where the previously broken support blue trend line is found. This could very well be a back test before continuing its longer term downward move towards $1,140.
