November 15 2018 | AtoZMarkets
Gold gained strongly yesterday after it was supported above 1195. Will price continue downside?
Gold was earlier in the week, dominated by the bearish pressure. However, price rallied strongly yesterday after finding a support just below 1200 – base of the 5-6 weeks zigzag channel. On the long term term degree -since the beginning of the year- Gold is bearish and completing an impulse wave downside. In the previous updates, we looked at how the 4th wave of this year long bearish impulse wave trend supposed to have completed late October at 1243. 4th wave is corrective – a shallow correction of the 3rd wave in an impulse wave pattern development (4th wave often corrects wave 3 at 38.2%). The complete 4th wave correction in this case was a zigzag pattern (that lasted for 5-6 weeks) with an ending diagonal wave c. If we are to make a forecast, we should expect the bearish trend to continue below 1160 (the 3rd wave low) as the 5th wave gather momentum.
In the last update, we started a new count of the 5th wave from 1243. After price broke below 1212, there is a big chance that the sub-waves 1-2 of the 5th wave have already completed. The 3rd sub-wave therefore should break below the base of the 4th wave channel to 1180-1160. The 3rd sub-wave is expected to be an impulse wave. However, price was supported at the base of the 4th wave zigzag channel yesterday and rallied swiftly to test 1212-1218 resistance zone. Will price continue downside?
Gold Elliott wave analysis and important price levels
The first and second sub-wave of the 5th wave ended at 1212 and 1237 respectively. The 3rd sub-wave by extension could continue below 1130 after breaking below 1180 and 1160 support levels. If price is being held below 1212-1218 resistance zone and breaks below 1195 support, we should see 1150 and 1130 happen this month or next. Unless a fast break above 1237 happens, the near-term direction is downside.
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