FX.co ★ Gold Elliott wave analysis for August 5, 2013

Despite breaking below and out of the upward sloping trend channel, prices bounced right back up from our first target at 1,287 making a low near 1,284. Trend remains down and we believe that as long as the prices trade below 1,330-40 resistance, the bearish scenario has more chances of success.

Short-term support is found at 1,304 and then at 1,295. Short-term resistance is found at 1,323 and then at 1,330. We remain bearish and we will add if support fails. The long-term wave count remains the same although the bullish scenario survived in the last minute as it was put to the test with the last decline to 1,284. If prices move below 1,266 then the bullish alternative will be canceled as wave 4 cannot overlap wave 1.

The back test of the broken upward sloping channel may still be another bearish sign if prices cannot manage to move above 1,325 and 1,330 soon. Concluding we remain bearish with 1,260 as the first target if the low at 1,,284 is broken. A good sign for bears will also be the break of the 1,304 support. On the other hand, bears do not want the highs at 1,330-40 to be retested.