Technical analysis is a powerful tool for creating a better sense of the market and making some predictions based on price actions but it's useless or it has minor importance when a big news with catalystic role appear. XAU/USD seemed unable and weak to break and mostly established the 1263$ level resistance being in a shakeout area for 20 days more or less. First it was the US descision to launch cruise missiles on a Syrian base that helped XAU/USD reach the 1271$ level intraday but then the selling power sent back the price back at 1253$ level,once again bears confirmed their dominance at these levels. Two days later president Trump decided to provoke North Korea through twitter,as it's logical with war possibility rising at the background XAU/USD finally took this extra push it was needed to break and established the 1260$ area for good. XAU/USD now is at 1287$ and try to break that resistance that it holds since 2016/11 to reach the highs of 1315-1320 area. As i mention before at my articles published at 26 January of 2017 and 26 march of 2017(SEE RELATED IDEAS BELOW) we had a 5 Elliott waves structure and now we wait the ABC correction waves before making new highs. Remember that these violent rallies may favor the short-term trader but the same way the went up they can come down due to absence of supports,so be careful with your trades at these moments of extreme volatility due to geopolitical reasons. I believe we might reach the 1315$ area where we have the 23,6%FIB level and a strong reistance and then i expect a pullback as i show at the chart until 1240$ levels near lows of wave 4.
TECHNICALLY We can see at the chart the 5 Elliott waves and the corrective waves ABC. We can also noticed the ascending channel of XAU/USD. Fibonacci levels well repsected. LEVELS TO WATCH:
BULLISH SCENARIO: 1290$ GOOD RESISTANCE 1315$ GOOD RESISTANCE AND 23,6% FIB LEVEL 1370$ PREVIOUS HIGHS
BEARISH SCENARIO: 1278$ GOOD SUPPORT AND 38,2% FIB LEVEL 1263$ VERY STRONG SUPPORT 1253$ VERY STRONG SUPPORT AND 50%FIB LEVEL 1233$ SUPPORT 1222$ VERY GOOD SUPPORT AND 61,8% FIB LEVEL 1200$ GOOD SUPPORT PSYCOLOGICAL LEVEL 1185$ YEARS LOWS
Wave 5 have traveled further than 100% of wave 3. Wave 3 is shorter than wave 1. This invalidates the impulse count. Its either 1-2, 1-2 or abc-x-abc or 1-a-b. Gold running on 5wks green on low volume makes me think 1-a-b and c down is next.
The_Greek_Trader
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@OwenMohd, believe i know the fundamentals of Elliott waves theory due to my father who was a great trader.Elliott waves theory was developed in early 1920's it was ok for the markets back then but markets are changing.i am not saying to change Elliot's theory but adapt it.Those points you are mentioned were important but now some principles changed and i trade on them quite a while if you put my father's years into consideration.Imagine back at 1970 where A.Cohen did a statistical exeperiment on commodities and J.Sibbet on futures both based on contrarian methods and Elliott waves found that some principles were hurting the profit margin.So i don't blame you because they teached you the classic way of trading because it's convinient for the big fishes and you are 100% right based on that classic way ,but we all being judged by the RESULT and if you see my articles on gold since January they are totally correct and not by luck.It's like trying to see a 3D movie on non-colored TV of 1920's think about it.
Thanks for your comment btw.
Happy trading!