FX.co ★ Gold Technical analysis for September 2, 2014

Gold price has broken short-term support at $1,280and is testing the lows at $1,270. Critical support is at that level. Our bullish scenario is now in danger of getting canceled. The bearish scenario sees Gold price to move to $1,200.

Gold price has broken the previous low at $1,280. Price remains below Ichimoku cloud and is testing previous lows at $1,270. Resistance is found at $1,295-90. As long as price is below that level, we should expect the downtrend to remain strong. When price breaks below $1,270, we should expect a strong sell off.

The price level at $1,270 is where the red upward trend line is found. Breaking that level will cancel my wave count and will put pressures on Gold price with $1,200 as a potential target. Price is still below the Ichimoku cloud in the daily chart. As long as price is below the cloud, the trend will remain bearish. $1,295 is a critical resistance level and should be used as a stop for short positions.