Gold is being held below the 1233 resistance this week. With price breaking below 1220, will the yellow metal drop to 1200? The following uses technical analysis for more insights.
October 2018 | AtoZMarkets – Early in the London session today, Gold has started bearish with a move to 1220. This week, the Gold market has been bearish with a strong resistance level at 1233. Technically, it was believed that Gold would start dropping up to 1220 in the coming week after last week bullish breakout. From Elliott wave perspective, price is building up a bearish impulse wave which started late January 2018. The impulse wave is believed to have completed the 4th wave which was a bullish correction. The 4th wave was believed to have started mid-August and lasted for 2 months. If the last Gold technical forecast holds, price should drop to 1200 and even 1140 in the coming months.
Gold Technical Overview and Important Price Levels
In the last update, after spotting the end of 4th wave, price also completed a head and shoulder reversal pattern which required a good bearish breakout. The chart below shows a bearish breakout early in the London session.
1220-1215 is the main hurdle for the bearish run. If price drops below 1215, we will most likely see the emergence of a lower degree bearish impulse wave to 1200 in the coming days. This bearish forecast will be invalid if price spikes above 1230-1233 instead of a break below 1215. The immediate trend is still bullish though price activities this week shows a possible change of trend in the coming days.
Do you agree or disagree with this forecast? You want to compliment it? Please share your thoughts in the comment box below.