Gold has extended its 3rd wave down from 1,360$ and therefore there is more downside to be expected. Short term support is found at 1,200-1,190. Short term resistance is found at 1,240-50. We believe that the downward move from 1,360 is not over and we should expect wave 4 and 5 to unfold.
Wave 4 should reach near 1,230-40 and wave 5 should make a new lower low towards 1,200-1,190. The trend remains down as prices continue to make lower lows and lower highs. Breaking above 1,258$ will put this wave count into question. 
The longer term trend as shown in the daily chart above remains down. Prices on a daily basis continue to trade within the blue downward sloping channel. The head and shoulders pattern was broken and we have 1,140$ as target. The 34 day MA has a negative slope. The lower lows and lower highs pattern confirms downtrend. All these are signs that trend is down. Only if prices break above 1,360$ we can say that the trend has changed in the intermediate term. For now we remain bearish with 1,140$ as target.
The material has been provided by InstaForex Company - www.instaforex.com
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