$XAUUSD is likely to reverse. Possibly fast and deep. Today’s closure is the second bear alert in one week. The details below.
On May 19, XAUUSD closed with a high-wave doji that frequently signals the end of the rally. The next three days the price failed to hit a higher high. Today, on May 24, the stock formed a bearish Dark Cloud Cover, building up the bearish pressure. Note that it happened in the last 30 min of the day – quite a statement.
From the technical perspective, XAUUSD is significantly overbought on the daily.
If one compares the beginning of long correction in 2012 to the current one, there are many similarities in the waves and indicators – look at the blue rectangles on the monthly chart. The odds of a reversal are high.
- If in the next several days the stock closes (daily) below 1851.94, the reversal would be confirmed.
- If XAUUSD closes above 1890.15, the rally would continue. Though the odds are rather slim.
I will share the targets once the direction is set and expect it to happen before May 31.
I hope I am deeply wrong.
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