Forex Technical Update 11.4.2010 – Gold’s Elliott Wave Count Adjustment (XAU/USD)

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Forex Technical Update November 4, 2010 - Gold's Elliott Wave Count Adjustment
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

XAU/USD
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  • 4H: The zig zag scenario and count is invalid. The \"B\" wave is too strong. Looking at the 4H chart, we see that the market instead of going ABC, could not make a lower low in the \"C\" wave and instead broke above B. Therefore, I think that count is invalid, and instead, a new count should be considered. The market could be done with the correction from about 1385 to 1315 area.
  • When the market broke above the declining trendline on 10/28, the market may have started a wave 1, and the decline that was supported yesterday from going further down was wave 2. The current rally is strong and fits the description of wave 3. Further confirmation is the RSI breaking above 70 and price level breaking and closing above the previous pivot at 1385 area.
  • Finally, the market could still be in a flat correction instead of a zig zag. The twitsting and turning of consolidation patterns is one of the hardest thing to follow and makes even pure Elliott Wave practitioners cringe, so for a clear signal, I would like to see the market break above the previous all-time high, and then show a decently strong but failed bearish attempt, held above 1350.
  • These signs point to further rally for a first target at 1420 area. This is the about 150% expanded retracement as shown in the daily chart below and is a good projection for the current swing.

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Fan Yang CMT
Chief Technical Strategist

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 analyses.



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

Referenced Stocks: SMA

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