Gold dropped massively yesterday after completing an important corrective pattern. The following 16 May Gold Elliott wave analysis looks at Gold technical forecast based on Elliott wave theory.
Gold has dropped about 350 Pips since yesterday. It consolidated before the drop. More importantly, a clear double zigzag corrective wave 4 was completed before the drop. Price broke below the 1300 resistance level. It seems an impulse wave is completing downside as price hits a rising ttrendline.
The chart above shows the long term forecast of Gold. A double zigzag bullish correction, expected to complete above wave (W) high. Price has instead faltered but that might not last long as the long term forecast still points upside. What levels can we watch out for?
For more than 3 months, price ranged between 1366 and 1300 as shown in the chart above. But yesterday, the bearish momentum drove price below 1300 for the first time in more than 3 months. The next level to watch out for is 1236 but price could return upside before hitting this price level. Why could this happen? The chart below shows price about completing an important wave pattern.
16 May Gold Elliott wave analysis: what next?
A long term zigzag pattern is emerging as the chart above shows. Wave a (in green) being a leading diagonal, wave b( in green) a Zigzag pattern and the last leg (wave (c) is emerging into an impulse wave. In addition, price is about hitting a rising trendline which could act as a support. If the bearish momentum lasts further, it should break the trendline easily. If price holds above the trendline and breaks above 1297.39, the long term bullish correction should resume, otherwise, a dip to or close to 1236 is more likely. Stay tuned for the next update.
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