Gold continued the bearish run this week. Price has now dropped about 4.8% since the last top. Where is the next reversal level to watch out for? The following analysis is based on 13 December Gold Elliott wave analysis.
13 December, AtoZForex – Throughout November, price was making a bullish correction. The bullish correction was sub-wave of a larger degree bearish correction. The reversal zone was projected before price even got there with the Elliott wave theory , Fibonacci analysis and other technical methods. The pattern was a double zigzag and was expected to end at 1297-1300 reversal zone. Price did exactly and dropped below with a heavy breakout.
In the last update, we analyzed the wave pattern of the drop. It was expected to be corrective and get to 1260-1261 based on the then current price action and wave analysis. The chart below was used in the last update.
The bearish move is expected to continue to 1250 bearish target. 1260-1261 level must be watch closely as it could provide a good support for price. A zigzag pattern could be about to complete the long term bearish correction. It’s important to watch out as price digs deeper. Unless a sudden break above 1290, the intraday trend is still bearish.
Price dropped way below 1261 in a move that looks more impulsive than corrective. If an impulse wave emerges, it could be the A-leg of an expected deeper correction downside. The chart below shows the new forecast.
13 December Gold Elliott wave analysis and forecast
The chart above shows the emergence of an impulse wave at the 3rd sub-wave. The 3rd sub-wave is about ending at 1235 (161.8% Fib-projection of wave i from ii). A 4th wave rally could be seen to 1252 or 1262 before the bearish move continues. A double zigzag could also emerge with the first zigzag (wave w) ending at 1236 and price rallying to 1262 for wave x. A drop to 1220 or 1200 is expected after the correction. Stay tuned for the next update.
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