Gold has been trading within a triangle consolidation since early this week. The yellow metal might be carving its last leg within the triangle, wave ‘e’, before breaking higher towards $1830/40 mark. Also note that it could be the last wave up before a meaningful pullback.
Gold had earlier dropped from $1916 through $1677 lows in the past several weeks, clearly subdividing into 5 waves, marked as Wave A on the chart here. Ideally, after an impulse drop, prices should produce a corrective rally in the opposite direction.
Gold might be unfolding its corrective wave since $1677 lows, and could terminate around $1830/40 zone before reversing lower again. The yellow metal remains set to push higher in the near term, before bears are back in control.
Alternatively, Gold might have carved a corrective drop between $1916 and $1677 in the past few weeks. If correct bulls might remain inclined to push further higher towards $1916 levels, before completing the structure.
Either way, traders might be preparing to initiate fresh long positions now, with risk below $1800 and potential target towards $1830/40. Bears might be back in control thereafter.
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.