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Gold Elliott wave analysis for July 23, 2013
Gold held support yesterday and continued its rise towards the wave relationship where wave C is equal 1.618 times of wave A. Currently this last 5th wave up is nearly 100% equal to wave 1 and 3. Additionaly prices have already completed 5 waves up and there are increased chances of a downward move. At least a corrective down move towards 1,280-90 is epxected. If however our bearish scenario that this upward move is an A-B-C correction, then we should expect new lows in August.
In the daily chart as shown above, prices have reached the upper boundaries of the upward channel and this is another sign of a possible intermediate and short term top at this level. The entire upward move from 1,180 is a 3 wave move and unless prices push below and outside of the upward sloping trend channel, we should always keep in mind the possibility of a longer term bottom at 1,180.
Golds impulsive upward break of the triangle is nearly complete. We prefer to close the rest of our long positions or at least raise our stop to 1,322. We expect prices to pull back and our profits should be protected. Currently the bullish scenario that implies and new upward move has started at 1,180, it is valid until prices break below 1,260. Until that point we should look for bearish signs. One bearish sign will be the break of 1,323 price level. 1,300 is also important support level, if it is broken it will give momentum to bears. Confirmation of a longer term top and increased possibilities of a new low below 1,180 will be given if prices break below 1,260. Concluding, we are exiting from our long positions and will consider going short if prices break support. Stop is the last high.
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