Gold staged a solid rebound on Thursday after three days loosing streak. Price has now advanced to 1225 intraday resistance level.
October 2018 | AtoZMarkets – After it peaked at 1243 last week, Gold dropped to 1211, losing more than 300 Pips in less than four trading days. The drop was at the back of a technical reversal pattern at the end of the 4th wave of the year-long impulse wave. The 4th wave was therefore expected to have ended at 1243. However, price rallied strongly on Thursday to recover most of the Monday-Wednesday loses. Will Gold price break above 1243 to continue last month bullish correction or will be limited below it to continue the year-long bearish trend?
Gold Elliott Wave Analysis and Important Price Levels
The daily chart above shows the year long impulse wave from 1366 early this year. Last month, at 1243, wave 4 completed a zigzag pattern at a strong resistance level (formerly support). This week, price responded and dropped downside. The 5th wave is expected to continue downside and drop below 1160 if not truncated. The long term forecast is downside until price breaks above 1243. The 5th wave is expected to be an impulse wave or an ending diagonal pattern. In the last update, we tried to label the drop from 1243 to start a wave count for the 5th wave. The chart below shows how the 5th wave could progress putting the current rally in the picture.
30 Mins Chart
The first sub-wave of the 5th wave seems to have completed at 1211. The surge from 1211 is probably part of the 2nd sub-wave. If a 3-wave correction emerges below 1243, the bearish trend should continue far below 1211. This bearish forecast will be invalid if the current rally hits above 1243.
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