Gold prices had dropped sharply through $1677 lows early this week before pulling back towards $1750 mark again. It has been correcting since then and managed to reach $1718 yesterday before finding short term support.
Gold bulls might be poised to take it from here again unless a complex correction is unfolding towards $1705/10 levels, which is fibonacci 0.618 retracement of the recent rally between $1677 and $1752 levels respectively.
Gold faces short term resistance at $1737 and a consistent push through that mark would confirm further strength towards $1750 and higher. Potential remains for a counter trend rally to materialize towards $1820/35 levels, going forward.
Looking into the wave counts, the yellow metal has dropped between $1916 and $1677 levels clearly sub dividing into 5 waves labelled as I through v on the 4H chart here. Ideally, the above impulse wave should be retraced by a corrective rally, before resuming lower again.
The fibonacci 0.618 retracement of the above drop is seen to be passing through $1825/26 mark, which could be the next potential resistance for a turn lower. It is also close to $1834, previous wave iv termination of one lesser degree. Looking lower from there, if prices manage to reach.
Finacademy Technical Team
Gold prices dropped through $1773 lows on Thursday before finding support again. The drop from $1793 was in-line with price action of a gartley.
The US dollar index might have carved a lower high around 96.50 mark on Tuesday. The index dropped through 95.80 levels on Wednesday before finding some support.
USDJPY is soon approaching a formidable resistance zone around the 114.40-50 mark. The currency pair has been carving a corrective rally since 112.50 lows.