Forex Technical Update 11.10.2010 – Short-term Elliott Wave Count for Gold (XAU/USD)

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Tools:
Simple Moving Average( SMA ) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Fibonacci Study
Elliott Wave Principles
Market and Price Action  (patterns, candlesticks)
Multiple Time-Frame Analysis

Gold continues to make new highs and is in an impulse wave. Yesterday, we anticipated support at 1390 area ( Refer to 11.9.2010 Intraday levels and scenarios ), and the market did indeed respect that pivot. Today however, another attempt may go towards 1365-1370 area. Let's look at the charts.

Gold (XAU/USD)
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  • Daily: The 4H chart clearly shows gold in an impulse wave, and it does not really take a wave technician to tell us Gold is in an bullish mode. Still, seeing the waves develop can help you anticipate corrections and important pivots.
  • An important pivot here is 1350, which would invalidate the count we have above. That is because we are likely in wave 4, and it should not overlap 4.
  • Instead, since it appears we have completed an internal wave (v), a zig zag (a)-(b)-(c) correction targets the middle of the previous wave (iii). 50% retracement could be a logical area, which is near 1370.
  • Let's look at the 1H time-frame to try to stalk this (a)-(b)-(c) zig zag.

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  • 1H: The 1H chart shows some more details on the internal count. The (a) wave developed after a bearish divergence with the RSI. After (a), the RSI broke bel0w 40. This suggests it is indeed the first leg of a correction.
  • A similar leg can develop. We see that the projection is indeed toward 1370-1365 zone. This is also just above the 61.8% retracement zone, and in the middle of wave (iii), sort of a guide for this wave (c).
  • Then, look for bottoming in this 1365-1370 zone, and a return to the uptrend.

Do you have another projection of the AUD/NZD?  Do you think the AUD and NZD are basically ranging in the long-term, so an intermediate term high from March for example respresented significant resistance. We would love to hear from you.
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Fan Yang CMT
Chief Technical Strategist
FXTimes

Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Commodities

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