Gold is Going Down in Waves

Gold went up in three waves during the month of August after a dramatic collapse in previous months. In the same fashion it has been going down since 21^st of August when the top was made at 1170 level. The first wave formed from the 21^st to 24^th of August where it found short term support at 1145. It formed a bullish pin there. 

However, price made another wave down in the next couple of days from 25^th to 26^th of August. It then went up to test previous support that became resistance. 1145 was well defended by gold bears and price after ranging till the 9^th of September proceeded to fall (third bearish wave). 

It looks like price has found its short term support at 1100 level. Bullish pin at support on Friday indicates that price may go to its previous support of 1115-1116 level (now resistance). 

Looking at a broader technical picture, it does not seem that the move down is over. We might expect one more wave down that would take the price of the commodity to 1080-1070 area. This is the area where gold bottomed in the months of July and August. The fall should stop at that area. 

Cable goes below Asian lows

As expected a second breakout occurred in gbp/usd pair. The first one was a false break upwards at the time Frankfurt markets opened. The second one happened at around 8:40 GMT. US dollar bulls managed to push British Pound below Asian lows. However, price action that followed the break did not confirm real bearish bias. A bullish pin formed on 15 minute chart after the break. It indicates that the break might be false and a bounce off 1.5635 level is very real. 

For that to happen current low has to form and more bullish signs to appear. It could be railroad tracks, bullish pins, double bottom, inverted head and shoulders or other technical reversal pattern. 

15 minute bullish pin in gbp/usd

On the other hand, if you look at 4 hour chart you will see another bearish pin. This signal is far more stronger than 15 minute bullish pin. Taking into account the fact that British Pound formed a lof of these bearish pins over the course of a month we may assume that bearish bias should continue at least in the beginning of this week. The turnaround might be expected on Wednesday when two pieces of information come out: US CPI (Consumer Price Index) and FED minutes. Both of these could change the course of events.  


Bearish pin on 4 hour chart in gbp/usd