Gold has continued upside after breaking away from 1262-1265 reversal zone. Is price aiming to test 1370-75 resistance zone? The following give insights based on Elliott wave theory.
January 03, 2019 | AtoZ Markets – Gold's upside momentum has increased in the past weeks. Price is now aiming 1300 significant handle. A break above this level would mean that the long term bullish correction would continue. Yesterday, after the new year break, Gold dropped nearly 100 Pips to trade at 1278. It returned upside afterwards to hit 1292 after gaining nearly 135 Pips. From the intraday degree, it seems the rally will pause a bit and price would make a bearish correction before it continues upside. This update looks at the long and short term technical sentiments.
In the past updates, we have been looking at two scenarios. The first scenario expected the current Gold bullish run to end at 1262-1265 resistance zone and drop thereafter far bellow 1160. If price breaks above his zone, the second scenario expects a test of 1300 en-route to 1360 as part of a long term bullish triangle pattern. Price went with the second scenario and hit 1292 in the process.What next?
Gold Elliott Wave Analysis: Long term
The long term wave analysis above shows price making a bullish correction from 1050. Wave A ended with an impulse wave at 1375. The drop from 1375, Wave B, has taken much more time and might take even more. If the drop from 1375 ended at 1160 with a Flat pattern (though the last leg didn't give a 'textbook' impulse wave), then wave B has already completed. Gold should break above 1370-1375 resistance zone and push to the 1500 handle in the first quarter of 2019. Alternatively, if wave B is resisted below 1370-1375 zone, we might see one more big dip to 1200 (to complete a triangle wave B) before the bullish run continues.
Gold Elliott wave Analysis, H2
The chart above shows an impulse wave advancing from 1160. the impulse wave has not yet completed its 3rd sub-wave which should continue above the 1300 handle. A dip is expected to 1256-1265 before the bullish move from 1160 continues. This wave scenario would be invalidated if price drops below 1243 support. In as much as price keeps up above 1243, it will break more levels upside.
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