In this article I will be discussing the chart of Gold (XAU USD) from the Daily time frame to the hourly using Elliott Wave.
Daily Chart :
We see clear five Waves down suggesting that we have completed the Wave 1) or Wave A) near the 1045 level, from there on we are seeing a Wave 2) or Wave B) correction to the upside.
Currently price seems to be propagating in Wave B of Wave 2) or Wave B).
4 Hour Chart :
Moving down to the 4 Hour chart we see that we have completed the Wave A near 1375 and Wave B seems to be forming either a Flat Type of structure or a Triangle formation.
We have the Wave a of Wave B complete near 1120 and from there on we see a Double Zig Zag type of Wave progression to the upside in Gold for Wave b of Wave B.
Within this double Zig Zag price seems to be currently in the Wave .b of the second Zig Zag which means that we have minimum 1 leg up remaining for Wave .c of Wave b.
1 Hour Chart :
We see that Wave .b is progressing as a Flat type of structure with the Wave B (Black) of this Flat propagating as a Triangle however Wave .b by their very nature are deceiving and hence this structure can certainly take up another form as well.
The current trading plan should be to go long for Wave .c either on break of 1362 (Wave .a high) or on low of Wave .b which is due to play out.
It is also worth noting that since this is the last leg of the Double Zig Zag we should see a good enough down move once the same is complete.
Points worth noting :
- Wave b should not go above 1473 as that is the 138.2 Inverse projection of Wave a.
- Since 1473 is much higher compared to the current market level of 1311 hence we can even see a Triple Zig Zag formation for this Wave b.
- Since we are expecting a Flat type of correction for Wave B hence it will go above Wave A high (1375) giving a false buy signal and trapping in long traders who will buy it considering a breakout to the upside hence remain aware of the same.
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