Could Gold make a bearish correction last week following the current bullish move? The following analysis is based on 8-12 January Gold price weekly Elliott wave analysis.
07 January, AtoZForex – Gold moved just as expected last week. We expected price to resume the long term bullish trend after the 2 month bearish correction came to a halt in December last year. Since the end of the corrective move, price has rallied more than 7% to close above 1300. Price might soon start a correction of this rally before it continues upside. This is what could happen this week and it’s good to prepare for this high probable possibility.
In the last update, I wrote about the possibility of this bullish move to continue to 1330-1350 before a bearish reversal. I was also looking at the possibility of having a reversal pattern at this region for more confidence. Looking at the chart closely, it now seems something important is forming. Before going to this, let’s review the last update to remind ourselves where we are coming from.
The rally is expected to continue to 1330-1350. A bearish correction could happen from this zone back to $1280-$1300. The rally should continue afterward. The bullish trend has been re-established and it will take a very strong bearish force to change this status. In the coming weeks/months, price is expected to head toward 1500.
Price is completing an impulse wave below 1330-1350 reversal zone. The chart below shows a pattern about to complete at the top of the impulse wave rally.
8-12 January Gold price weekly Elliott wave analysis: what next?
There is a possibility of an ending diagonal mouth at the top end of the impulse wave around 1330. If price stays below 1330 and breaks downside as shown above, we could see a corrective dip to 1300 or below. At the end , the bullish trend should continue. Until this pattern completes as expected, we are still in a no man’s land as price could rally further. There will be an update mid-week, stay tuned.
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