Gold has continued downside on Thursday after it dropped below 1318 intraday support. The following looks at what could happen next based on Elliott wave theory.
February 28, 2019| AtoZ Markets – The US advanced GDP came better than expected on Thurday. The market expected the data for last quarter to come at 2.2% but it came at 0.4% better. The data release gave the Dollar a rallying effect quickly seen across the board. Gold, a dollar-denominated commodity, points downside and now entering into a bearish 1318-1302 zone. On Wednesday, the precious metal dropped from 1330 to 1316 after staying within a triangle many hours prior. Today, before the data release, Gold built up a recovery to 1327 but quickly fell to 1313 after the data. The dip might continue toward 1300 as price often gets attracted to handles like this.
Gold Elliott wave analysis and important price levels
On a larger scale, the current dip which started last week from 1346 was meant to be corrective – the 4th wave of a long term bullish impulse wave building from 1160. In the last update, where we used the chart below, we had expected price to continue into the 1318-1302 territory where the last up-swing started. If price hits this zone, we will have to see if the bearish run gets strong enough to bridge 1300 handle.
We expected a break below the support line of the triangle to be followed by further dips to 1300. At the end of the 4th wave, the bullish trend should continue. The chart below shows the new update.
The bearish 4th wave continues after breaking below triangle wave b around 1320. The dip is expected to continue to 1302-1300 support level. The next bearish momentum will determine if there will be a bullish reversal at the support zone. The long term wave forecast still points upside but until price completes the current correction, we won't call for a bullish reversal yet.
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