Gold is pushing to 1250 price level. Will price rally further? The following 3-4 July Gold Elliott wave analysis looks at XAUUSD technical forecast based on Elliott wave theory.
Gold looks like it will start a strong rally after bouncing off 1237 with a reversal Impulse wave wedge pattern. Sometimes, an impulse wave can look like a wedge pattern. Wedge patterns are similar to diagonals. The difference is that, in all diagonals, there must be wave overlaps – wave 4 retraces into the territory of wave 1 whereas non-overlapping will not invalidate a wedge pattern. A wedge pattern is a much encompassing price pattern. You can see an impulse wave or a diagonal taking the form of a wedge pattern. All diagonals are wedge patterns, not all impulse waves are wedge patterns, not all wedge patterns are diagonals. Simple. In today’s update on Gold, we would see an impulse wave occurring as a wedge pattern. Before we look at that, let’s review the last update on Gold.
The chart above shows the dip from 1310 to 1261 which was labelled the 1st subwave of wave iii of (V). If price continues like this, we should see Gold drop below 1200 in the coming weeks. It seems the best trade entries is to wait for a bullish pullback and join the bearish trend. The last pullback ended at 1310 to complete wave ii. We might see a similar correction to 1280-84 before another bearish move to 1230. Unless a strong bullish move happens above 1310, the trend remains bearish.
Price didn’t rally as much as expected as the bearish move persisted. Have we now a reversal pattern? Probably. Check this out.
3-4 July Gold Elliott wave analysis: what next?
The Impulse wave wedge pattern shown in the chart above ended at 1237 and price is breaking upside significantly. If the pattern would lead to a correction, we should see price at 1280-1290 before dropping again. If the rally looks impulsive, it means the pattern might lead to a change of trend and a break above 1390 is much likely. Stay tuned for the next update.
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