Gold Wave analysis for August 20, 2014

Gold is testing important Fibonacci and trend line support levels at $1,290-93. Our expectations remain bullish as long as we trade above that support level targeting $1,350 at least. The form of the decline from $1,322 is corrective and consists of 3 waves. The previous upward move consists of 5 waves and that is why I believe it is more probable to see another move higher.

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As shown in the  4 hour chart above, price is above the critical red trend line support but below the Ichimoku cloud resistance at $1,313. A  break above $1,313 will confirm our bullish view and that we are heading towards $1,350. Stop for long positions should be the $1,280 lows where the start of the impulsive wave is found.

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The daily chart shows that price is testing the lower end of the Ichimoku cloud. This is an important support for bulls. Next important support is the long-term red trend line that comes from $1,180 and touches $1,240. The support price level of this trend line is at $1,270.

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Daily analysis of major pairs for August 20, 2014

EUR/USD: This pair is weak and the weakness is supposed
to continue. The price is currently testing the support line at 1.3300, and
there is a high probability that the price would end up closing below the
support line.

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USD/CHF: This
pair is strong and the stamina is supposed to continue. The price is currently
moving above the formidable support level at 0.9100. This is a great
achievement for the bulls, and there is a high probability that the price would
end up testing the resistance level at 0.9150. That resistance level is another
hurdle to be overcome.

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GBP/USD: This market has dropped by over 550 pips since the middle
of July 2014. The Bearish Confirmation Pattern is very strong, and the price
could easily breach the accumulation territory at 1.6600 to the downside.

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USD/JPY: The USD/JPY pair has
broken above our target at the demand level of 103.00. The Bullish bias is now
quite strong. The next target is at the supply level of 130.50. Because of the Bullish Confirmation Pattern
in the chart, the possibility that the price would go further northward is
strong.

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EUR/JPY: The Euro
remains weak generally, but as a result of more weakness in the Yen (the Yen is
weaker than the Euro), this cross has broken out to the upside. Any movement
above the supply zone at 137.50 would give more weight to the current ‘buy’
signal in the market.

5.pngThe material has been provided by InstaForex Company – www.instaforex.com