Gold seems to be turning down. Today’s candle was entirely within the yesterday’s hammer and the bearish odds reinforced. Let’s explore the hypothesis from different angles.
Today gold made another solid attempt to close above 20 EMA and it was clearly rejected to close right below the line. The green candle today was entirely within the hammer of yesterday and this is viewed as a bearish sign. Thus, the odds, that turned bearish yesterday , strengthened.
The 6 green candles in a row did not move the daily RSI above 50. Something is fishy.
From the perspectives of Monthly and Weekly candles, both are bearish and the weekly seems to be developing a Falling 3 Methods.
It looks like gold last week completed an ideal (or very close to ideal) motive wave (1-5) down that greatly fits into the Fibonacci ratios and the channel. This wave is marked A/1 in red.
One of the main rules of Elliott Waves that “corrections are never five”. It means that after some pullback (marked as A/1-B/2, assuming a zigzag), there should be at least one more motive/diagonal wave down.
Based on Fibonacci levels, I think that the top of the hammer is the top of wave a in red and I am expecting gold to move down tomorrow. The depth of retrace and the candle would be crucial to determine the next targets.
There is also a hypothesis that this top is the top of wave B/2 and I need to assess the character of the next wave down to make this call (so far, slim chance).
Let’s see how gold behaves tomorrow and for the remainder of the week.
Forecast (copy from the weekly, no changes):
Gold was damaged greatly in June on the monthly and weekly frames. The odds are on the dark side.
There is no immediate sign for further decline and I am expecting gold to continue consolidation for the next 1-3 weeks within $1750-1815 channel.
As long as the daily candles close below ~$1805, there would be no sign of a prolonged rally. If anything changes, I will address in my daily updates.
If gold is going to make a bottom and reverse, we should see the bullish signs at least on the weekly charts. So far there is none.
The longer term forecast and targets are discussed in details in the Monthly and Weekly Analyses (link below).
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