Gold has gained over 100 Pips this week so far after a good bullish run. Will the bears return after this bearish pattern?
March 19, 2019 | AtoZ Markets – The yellow metal is advancing and regaining momentum after getting more demanded following US-China trade talks postponement. The Dollar continues the dip seen since last week and thereby triggered a bullish run on the zero-yielding commodity. The metal rallied yesterday from 1298 after retreating from last week’s 1% gain to 1306.
The market will be wary of tomorrow’s FOMC meeting. It’s expected that the bullish hold on this commodity will be softened until after tomorrow’s Fed’s decisions and economic forecasts. The potential reduced demand will probably see prices drop back to 1300-1302 important intraday price zone. Meanwhile, the Fed is expected to hold on to the current interest rates. No hike is expected until the third quarter of the year. However, the market will read into any dovish or hawkish statements or forecasts which could, in turn, change the buck’s short term outlook.
Gold Elliott wave analysis and important price levels
Gold’s long term direction is to the upside. From 1160, the price is completing an impulse wave which is expected to extend to 1360-70. However, the current dip from 1346 could be the 4th wave of this impulse wave rally. The 4th wave is not certain to have ended yet despite the current rally above 1300. The chart below was used in the last update to show how far the 4th wave dip has progressed.
Wave b of (iv) should complete at any price between 1302 and 1325. However, a dip below 1292 would convince us that wave b ended at 1311 and price would continue wave c below 1280 down to 1263-1244. Unless a break above 1311 happens, wave b could extend to 1325,to complete a more complex corrective pattern.
Since this update, the price has advanced to 1308. However, the intraday corrective pattern evolving from 1292 looks interestingly bearish if the price would play along. The chart below shows the new update.
From 1292, it seems price is completing a zigzag corrective pattern which would still be valid at any price below 1311 intraday top. The last leg looks like an ‘overshoot’ ending diagonal pattern. If price drops back below 1308, we would most likely see a dip below 1302-1300 intraday support zone. The 4th wave should continue below 1292 afterwards. Unless a break above 1311 happens, the current rally looks like a very high bullish correction.
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