Gold wave analysis for January 8, 2016 Market Analysis Review

The gold price has reached important short-term resistance levels in the $1,100-$1,110 area. A pullback is justified, but for bulls to remain in control, the price should not fall below $1,080 and overlap the high of the wave 1.

There are two possibilities regarding the wave count for gold. My favorite scenario that the long-term low is in, implies a new impulsive move has started that will change the long-term trend to bullish again. However, in order for it to hold, we need first to see an impulsive rise in gold. Up to now, we have seen only a rise in 3 wave as shown on the 4-hour chart above. It is a good sign that the gold price has manged to break above the Ichimoku cloud, but bulls need to see a pullback of the wave 4 and then a new high for the wave 5 to complete the first impulsive wave of the new trend.

Finally the weekly chart shows some movement. As expected by the oversold stochastic, the price has moved higher towards the important short-term resistance of the kijun-sen (yellow indicator). A weekly close above it will open the way for a move towards the Ichimoku cloud. Bulls should be cautious now.The material has been provided by InstaForex Company - www.instaforex.com

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