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Technical analysis

Gold Elliott Wave Analysis: The Bulls Are Back In Control as the Market Awaits FOMC

Sanmi Adeagbo | Nov. 29, 2018
Gold Elliott Wave Analysis: The Bulls Are Back In Control as the Market Awaits FOMC

Gold returned upside after yesterday's Dollar sell-off. Ahead of today's FOMC what next? The following give insights based on Elliott wave theory.

November 29, 2018 | AtoZ Markets - Gold has found its way back to 1227 after the dollar fell massively yesterday following Fed's dovish comments. The bullish trend might resume above 1243 if the dollar sell-off continues today after the FOMC meeting. Today the Fed will release the minutes of the 7-8th November FOMC meeting. At the meeting, the committee voted 9-0 to raise federal fund rate to 2.25% from 2.0%. In today's meeting, markets will read into any hawkish or dovish statements which will in turn affect the short term Dollar price. If the dovish tone persists, the Dollar sell-off is expected to continue. Gold might break above 1243 and continue upside till December.

From a long term Elliott wave perspective, a break above 1243 might see further rallies to 1360. The long term bullish triangle pattern can then continue. If 1243 holds and price drops below 1200, a dip below 1150 is very much likely. The long term bearish forecast eyes a long term flat pattern ending above 1122. In the last update, we looked at the lower degree price behavior. Price completed a zigzag pattern with a head and shoulder reversal pattern at the top. It dropped as expected to 1212. The drop to 1212 looks as much as corrective as impulsive. The corrective scenario prevailed after a break above the double zigzag channel. The bulls are closer to breaking above 1243 than bears below 1200 and therefore has a better chance.

Gold Elliott Wave Analysis and Important Price Levels

With the quick bounce off 1211-1212 support, the bullish trend might continue above 1230. A small dip to 1220 might happen before the big break. The market is expected to be quiet prior to the meeting, awaiting a clue to trigger the next direction. On the downside, a fast drip below 1211 will see price coming to retest 1196. A dip below 1196-1200 will set the market rhythm bearish again. 1211 and 1230 are the nearest most important support and resistance levels respectively above/below which price might trend properly.

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