Gold is dropping in price today after yesterday’s bullish run went bearish. What should we expect next? The following 10 July Gold Elliott wave analysis looks at the technical forecast of Gold based on Elliott wave theory.
Gold rallied above 1261 yesterday but before the end of the day, it dropped back below. The rally started last week from 1237 after the completion of a wedge impulse wave pattern. I discussed about an impulse wave wedge pattern in the last update. After the completion of this pattern, price quickly rallied to 1260 followed by a correction to 1252 before advancing further to 1265. The rally from 1235 was expected to hit 1280-1290 to complete the first leg of the large bullish move. With the current drop, there has been an adjustment to our forecast. Before looking at that, let’s review the last update where the chart below was used.
Price dropped from 1261 where the first sub-wave might have ended. Price hit slightly below 1252 (38% Fib-retracement). Once price breaks above 1261, we should see more higher prices up to 1280-1290. Despite this bounce off the 38.2% Fib-retracement level, we might see it drop to test 50% and 62% at 1249 and 1246 respectively until 1261 is broken upside. The FOMC comes later today and the NFP tomorrow, there should be enough price activities to validate or invalidate this forecast. Below 1237, this forecast will be invalid.
10 July Gold Elliott wave analysis: what next?
The chart above shows the correction that followed wave i or a) rally might not have completed yet. There is a likelihood of an expanding flat pattern. If the last leg completes as an impulse wave around 1246, we might see it continue the bullish corrective run to 1270-1280. Of course, flat patterns are difficult to spot in real time and are often transformed into a different pattern, so it will be interesting to know how this will play out. Stay tuned for the timely and regular updates.
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