Gold broke slightly above a month old bearish trendline. Technically, this indicates bullishness. Is this breakout genuine?. The following is an analysis based on 7 November Gold Elliott wave analysis and forecast.
07 November, AtoZForex – When price is trending, one of the tools used to follow up and measure the strength of the trend is the TRENDLINE. It is generally believed that when price remains within a trendline, the trend is still viable. On the other hand, if price breaks out, it means the trend is weakening. It does not necessarily mean that the trend will change its course completely, but could be an early signal of trend reversal, correction or just a consolidation. The momentum of the breakout is also very important. A month old trendline has been broken upside in Gold, could this mean that the bearish move will be corrected upside before continuation?. Let’s look at the last update where we used the chart below.
The chart above still points downside. A break below 1267 could lead to a break below 1260 and the bearish targets at 1215-1230. A break above 1282 on the other hand could hamper the bearish move and lead to price breaking above 1306. We should watch out for these levels.
It was expected that if price stays below 1282, there is a strong potential of a break below 1260 to reach 1215-1230 target.The long term double zigzag was expected to break below 1260 (wave w low). Wave x was thought to have completed at 1306 especially if price breaks below 1260. After the NFP, there wasn’t much bearish momentum despite the break below 1267. Price stayed above 1260 and broke the tendline upside. We have come up with a wave count to take care of an eventual trendline upside breakout as shown in the chart below.
7 November Gold Elliott wave analysis and forecast
A break above 1282 will send price upside and the W), X) wave in red will be favored. The X) wave will be expected to shoot above 1306. The larger degree still points downside. The internal waves of X) are shown in green (a-b-c). Unless 1357 is broken, the rally may not last longer than 1330 before the bears resume. Stay tuned for the next update.
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