After being rejected at 1240s, Gold has dropped more than 250 Pips in less than 4 trading days. To continue the year-long bearish trend, Gold price has broken below 1225 and 1218 intraday support level. Will the dip continue?
October 2018 | AtoZMarkets – Gold has lost more than 2% in the last four trading days. The bearish move from 1243 was highly expected from Elliott wave theory's perspective. Price had just completed the 4th wave of a bearish impulse wave at 1243. The 5th wave therefore, will be expected to continue bearish far below 1200 handle. This week, price broke below 1225 and 1218 support levels. It still has to break below 1208 and 1200 which are the next support levels in this bearish journey. Meanwhile, there might be a bullish correction around 1200 before the bearish trend resumes.
Gold Elliott Wave Analysis and Important Price Levels
In the last update, we started a new bearish impulse wave (wave 5 of the year-long bearish impulse wave trend). The 5th wave is expected to be an impulse wave or an ending diagonal. Since price still has a long way to go, impulse wave is often the default wave count until price reveals which of the motive waves would play out. The last update looked at the possibility of the 5th wave continuing downside but today's update looks at the sub-waves of wave 5's 1st sub-wave. This will help to know when likely the next bounce will be.
The chart above shows one of many ways price could move. At this point, there are many possible ways to label the chart above. As price progresses, the correct wave count will emerge. Price will likely dip to 1200 (base of the wave 4 channel) before starting the second sub-wave (a corrective bounce). In as much as price holds below 1243, the bearish trend should continue.
Do you have a different wave count? Please share with us in the comment box below.