Gold could record gains in the coming weeks as price completed an important corrective pattern. The following 22-24 May Gold Elliott wave analysis loos at XAUUSD technical forecast based on Elliott wave theory.
In the early days of the last trading week, Gold dropped more than 350 Pips in a fast bearish move. The drop was probably meant not to start a new bearish journey but to complete a bearish corrective phase of the intermediate degree. At the end of the week, price paused and was forming what we could call ‘price reversal signals’. In today’s update, we will look at what the reversal signal has morphed to.
In the last update, we looked at the possibility of price completing a larger degree Zigzag pattern with an impulsive wave (C). The terminating end of wave (C) was also completing a reversal ending diagonal pattern. The chart below was used in the last update.
Since price hit the rising trendline, it has paused a bit and forming a familiar reversal wave pattern – Ending diagonal pattern. A diagonal pattern at the base of wave (v) of (C) could mean price breaking upside to a least 1308. The next bullish level to watch out for is 1325. If price breaks below the diagonal pattern support line to invalidate it, the bearish move is going to continue as the rising trendline is properly broken.
Price has since, remained above the trendline mentioned, though the ending diagonal pattern was not properly formed. Instead of an ending diagonal, we had a ‘triple falling bottom’ pattern. This reversal pattern is very related to the ending diagonal and also effective in spotting price reversals. Aside this pattern, there is even one that’s more polpular.
22-24 May Gold Elliott wave analysis: what next?
The ‘Inverted Head and Shoulder’ reversal pattern is just completing the last leg of the larger bearish corrective wave suggests price would rally once the neckline is broken upside. Above 1297, we will likely see Gold soar toward 1325 level. Unless a fast drop back to the pattern zone, below 1290, Gold should trade at higher prices in the coming days and weeks. Stay tuned for the next update.
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