Gold continues to behave as forecasted in the weekly analysis 4 days ago. However, in the last mini rally it moved 10 points higher than expected and is sitting on the fence. 55 pips higher and the short term pattern could be broken. Let’s have a look into details from the candles and EW perspectives.
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From the Weekly: “a very fast decline implies that the metal is possibly going to develop horizontally or slightly upwards before the next move.”
Today’s candle closed a few point above the alert level, but, at the same time, it failed to move over the 8 EMA line. The odds remain bearish, but barely.
If another green candle develops tomorrow and closes above 8 or better 20 EMA line, this would be a serious bullish statement for a short-term rally.
The weekly and monthly candle formations are discussed in details in the weekly reports.
The EW long term remains the same for over a month. The green count is primary.
The short-term chart remains the same since September 8.
Today gold jumped a bit higher than expected. Still stopped 55 pips short from breaking the motive 1-5 wave.
If tomorrow it goes higher than 1783.35, the short-term pattern will be broken, but this would not be enough to break the green count on the long-term chart.
If gold resumes its decline, targets for wave 5 would be $1705-1740.
NOTE: $DXY candles today looked like they have taken a forecasted pause for two days and are ready to fly higher.
Gold was damaged greatly in Q1, 2021 on the quarterly frame and in June on the monthly frames. The long-term odds continue to be bearish.
Short term targets for wave 5: $1705-1740.
Timing for wave 5: end of September-beginning of October.
Levels to watch:
– a daily close above $1788 – a strong bullish signal;
– the weekly close above $1775 – possible bullish reversal.
I would like to reiterate that from the quarterly perspective, gold can have the short- and even mid-term rallies within a quarter, but what important is how the quarter ends on September 30.
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Previous Monthly and Weekly Analyses: