November 23, 2018 | AtoZ Markets
Gold has dropped to 1222 support level today after a bullish Dollar. The following give insights based on Elliott wave theory.
The Dollar spiked upside in the early hours of the London session. Following yesterday's thanksgiving holidays, the Dollar and most dollar pairs were quiet. Today however, Dollar started the day with a big gain. Gold, feeling the bullish-dollar impact, thus dropped to 1222 to trigger a bearish move that could continue to 1212 or even below. From Elliott wave perspective, price completed a corrective zigzag pattern from 1196 to 1230 with a diagonal C-wave (last leg).
In our most recent updates, the long term Gold forecast still points downside after price completed a large zigzag pattern at 1243 last month. A quick dip followed to 1196 and was expected to drop below 1180 down to 1160 as the 5th wave of the year-long bearish impulse wave gains traction. The bearish expectation was halted at 1196 with a more than expected big bounce to 1230. In the last update, we looked at an alternative forecast in case of a rally above 1243. Above 1243, the long term bearish scenario would be invalid. Meanwhile, at 1230, an interesting corrective pattern has completed.
Gold Elliott wave Analysis and Important Price Levels
From 1196 to 1230, price completed a zigzag pattern. Wave C was an expending diagonal pattern which works just fine as an ending diagonal to spot reversals. At least a 3-wave dip to 1212-1210 is expected to follow especially if price drops below wave ii-14 support line of the diagonal. A dip below 1200-1196 is also very much likely, to continue the long term bearish forecast. A fast rally above 1230 would invalidate this scenario.
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