Gold prices declined sharply on Tuesday towards $1780-82, before bouncing back. The yellow metal is trading around $1794 mark at the time of writing and might resume higher. It needs to hold above critical support at $1758 to keep the bullish structure intact.
Gold prices are pointing towards $1890-1900 and up to $1920-28 zone going forward. The fibonacci extensions of Wave (a) are pointing towards $1890 and $1928 levels, which is not displayed on the chart here. Bulls are expected to be back in control until $1758 is intact.
Gold’s wave structure looks constructive with potential Waves (a) and (b) in place around $1834 and $1721 respectively. Further Wave (c) is in progress towards $1900 levels before giving in to bears again. The metal is expected to reverse lower toward $1450 thereafter.
With Wave (c), Gold prices might have carved lower degree waves I, ii, iii and potential iv around $1812, $1758, $1877 and $1782 as marked on the chart. Furthermore, the yellow metal is bouncing from fibonacci 0.786 retracement of wave iii around $1782 mark.
A bullish reversal remains high probability from here as traders remain poised to hold long positions against $1758 initial support.
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.