Gold is turning back downside on Wednesday after a retest of 1315 intraday resistance. Will price continue downside to 1300? The following give insights based on Elliott wave theory.
February 13, 2019 | AtoZ Markets - The price of Gold has stayed a bit stabilized this week oscillating between 1315 and 1308. Price was bearish on Monday having a run toward 1300 handle. From 1302 however, price rallied upside yesterday to retest 1315 but the momentum was not strong enough to continue the bullish trend. Currently, price is hanged between 1315 and 1302 important intraday price levels. A dip below 1300 is still very much likely to happen before the trend continue upside.
Since the beginning of this month, when Gold turned from the multi-months top of 1326, we have monitored the current dip. Price pattern is corrective, indicative of a continued bullish run. The impulse wave pattern from 1160 is currently making the 4th wave. The current dip (4th wave of the rally from 1160) was expected to go deep into 1298-1277 zone. But with 1300-1298 holding fast, it's quite likely that the current dip might not go into this territory. However if 1300 is broken significantly downside, the bearish run might continue into this zone.
Gold Elliott Wave Analysis and Important Price Levels
In the last update, we expected a dip below 1300. Price didn't hit 1300 as expected but didn't break above 1315 resistance as well. The chart below was used.
The chart above shows a double zigzag pattern at 1280 is a possibility. A fast break below 1302 intraday support would have supported this forecast. Though this forecast is not invalid yet but price has changed and so is our outlook. There are two possible scenarios that are of high probability.
1st Scenario, 30 Mins Chart
Since dropping to 1302, price has touched the extremes of the lines binding this range three times. Two more times and a triangle pattern will complete. The triangle, if completed within 1315-1302, will be the wave (x) (2nd leg of the double zigzag 4th wave correction from 1326). A bearish breakout afterwards should lead to 1292-1295. Intraday bearish opportunity potentially exists after a breakout below the triangle (if it completes). The real deal is to wait for the 4th wave correction to end and join the next wave of bullish run to 1360-1370. Here is a similar scenario, painting similar picture.
2nd Scenario: 30 Mins Chart
Since a break above 1315 didn't happen, the original view still stands valid. A dip to 1295 should follow, to complete a double zigzag 4th wave. At the end of this correction, price is very much likely to continue upside to 1360-70.
Alternatively, there is a possibility of a price surge from the current price level. Price could still break above 1315 to complete the 4th wave at 1302 and push further upside. This scenario is perhaps less likely as the 4th wave will most probably have one more leg to the downside.
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