Gold completed an impulse wave toward the end of March and has since dropped about 350 Pips. Will the long term bullish move continue? The following 2 April Gold Elliott wave analysis looks at XAUUSD based on Elliott wave theory.
02 April, AtoZForex – Gold dropped nearly 350 Pips last week after completing a bullish impulse wave. Does this add to Elliott wave credibility? The edge Elliott wave gives is a winning one. For both short and long term trades, the R/R is often more than 1:2 and the %wins is much higher than average. That’s surely a winning edge. We discussed this impulse wave on the 26th March update. The update that followed, on 27th March explained how to join the move. Connecting with price after it connected with us has proved to be much better than picking tops and bottoms. One of my favorite entry methods is ‘buying the dip and selling the rally’ after price moves in the direction of forecast.
In the last update, we looked at the dip. It looked less like a correction than an impulse wave. Corrections often take more time to complete than impulse wave. We expected a 3-wave correction but the speed of this drop woke my suspicious mind. The chart below was used in the last update.
The 3-wave drop happened just as expected. But, the drop could also be likened to an impulse wave in motion. Corrective waves often take more time to complete than motive waves. I will stand aside and wait to see how price will behave in the coming days. The bearish trend should continue if the current dip extends to break below 1306 support. If price stays above 1306, there is still a bullish chance.
Since the last update, price has rallied nearly 100 Pips. Despite this rally, I am still not convinced enough about the bearish corrective pattern. Price could be making an impulse wave downside (with the recent rally as wave iv) thereby invalidating the larger degree wave count. Here is how I planned to join the expected bullish move
2 April Gold Elliott wave analysis: how to join the rally!
To join the expected bullish move, it may be important to wait for price to break above 1340 (to invalidate any chance of a bearish impulse wave) and then ‘buy the dip’. ‘Buying the dip and selling the rally’ is a very good entry method that ensures one does not get in too early. The only side effect is that trades can be missed. Stay tuned for the next update.
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