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Gold Elliott wave analysis: XAUUSD corrects toward 1433 intraday support

Gold Elliott wave analysis: XAUUSD corrects toward 1433 intraday support

Gold fails to build on Wednesday’s rally and has dropped below 1550 again. The following analysis is based on the Elliott wave theory.

September 05, 2019 | AtoZ Markets – On Wednesday, the yellow metal tried to resume the bullish trend with an attempt to break above the 1550-1555 resistance zone. The attempt, however, failed for the second time in 48 hours and the bull surrender its lead. The bear then pushed back to 1543 which is 100 pips away from Wednesday’s low. If the bear push further, there might be a breach of 1533 and thereby break below the bullish trendline support. 

Politics has been the major driver of the 2019 Gold rally and this might be maintained as long as there is no agreement between the US and China. Meanwhile, the market is a bit settled as it expected some important economic events today and on Friday. Today, the US ADP Non-farm Employment data and the Crude Oil Inventories will provide intraday price deflections before Friday’s US NFP and other employment data. The trend is still bullish unless the NFP on Friday comes out extremely better than expected.

Gold analysis: important price levels

Although the bullish trend has not given any bearish signals yet, it’s increasingly getting more limited as sellers look forward to a big bearish correction. Having said that, there is still potentially more space to cover upside. On a short term scale, there are many intraday support levels before the 1400 psychological level – 1533, 1516, 1480 and 1451. To the upside, however, the bull is still expected to push above the 1550-1555 resistance zone. If that happens, the Gold price might hit 1600.

Gold Elliott wave analysis

From the Elliott wave perspective, we expected an impulse wave or an ending diagonal pattern from 1492 to complete. At the moment, it is not clear which of these two patterns is emerging. In the last update, we only looked at the possibility of an impulse wave surge to 1600 with the chart below.

Price broke above 1550 as expected but quickly dropped to 1543 and now close to the 1533 support. Swing buyers are still around holding bullish positions with exits at 1516 or even 1480 below which this scenario will become invalid. 

From the chart above, the current dip might continue to 1533 which is the confluence of a diagonal and intraday horizontal support levels. If the price is supported at this zone, a massive rally above 1557 will validate this scenario and send the yellow metal to 1600. If the zone is breached downside massively, 1516 might be taken out and the price drop toward 1480. 

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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