Gold: The Make or Break Point 4H, 1W (May 08)

May 8, 2020

X Force Global Analysis:


In this analysis, we explore the evidence behind Gold's bullish and bearish scenarios.

Bullish Evidence

- We start with the chart on the left hand side, showing Gold's price movement on the 4H
- We see a typical bullish pennant pattern, in which we consolidate within a triangle after an uptrend
- Within the pennant, we can also count Elliott Triangle Waves (ABCDE)
- We have seen the completion of Waves ABCD, and are potentially looking to complete Wave E down at the 0.236 FIbonacci support
- Based on elliott wave counts and bullish patterns, we could see a breakout to the 1.618 Fibonacci resistance
- Also zooming out to the weekly, we can see evidence to support a bullish case
- We first see a bullish divergence, with higher lows on the price, and lower lows on the Relative Strength Index (RSI)
- The Moving Average Convergence Divergence (MACD) has also shown decent momentum, creating a new higher high
- The Ichimoku Cloud demonstrates a clear uptrend, and strong support

Bearish Evidence

- While the 4H chart remains bullish according to textbook patterns, in reality we could see a negation of the wave count, and a bearish breakdown
- We are seeing an extended bearish divergence on the weekly, with higher highs on the price, and lower highs on the RSI
- Gold is currently testing the upper resistance of the bollinger band, suggesting a potential correction down to at least the 20 SMA (Standard Moving Average)
- The RSI is close to being overbought on the weekly


What We Believe

We believe that both bullish and bearish cases are highly likely to play out, and it's imperative to wait for wave E as confirmation in order to determine what Gold's next move could be.

Trade Safe.