Analys från DailyFX
Gold Prices Dive for 3 out of 4 Days
The gold price correction has been more resilient than we have anticipated. Gold prices have sold off about 4% since the September 8 high was registered at $1357. Due to the break below $1300, our models are forecasting and giving more weight to continued weakness.
The chart pattern we are illustrating today is that gold prices finished a ‘C’ wave of a very large triangle pattern. ‘C’ waves of triangles tend to be complex waves and this one fits that bill. Assuming the wave count listed below is correct and then there are a couple of items we can imply:
First, we can anticipate a deep retracement of the December 2016 to September 2017 wave. It would be normal for the ‘D’ wave of this pattern to correct down towards $1215 and possibly even lower. Alternating waves in triangles tend to have Fibonacci proportion to one another. This could drive gold prices down towards $1215.
Secondly, the triangle pattern implies two more waves to finish the triangle, the ‘D’ and ‘E’ waves. The Elliott Wave triangle pattern is a five wave pattern. Since this is a large degree triangle pattern, it may take several months for these final two waves to print.
Lastly, the triangle pattern implies gold prices remain inside the $1357 high and $1122 low while the final two legs are carving. Each wave extreme remains inside the previous wave extreme as prices consolidate the previous large down trend from calendar year 2011 to 2015.
Learn more about triangle patterns by watching this one hour long webinar recording devoted to triangles.
Gold Price Daily Chart Sept 20 2017
The key to trading in this environment is to watch your support and resistance levels and seek out those opportunities with good risk to reward ratios. For example, closer inspection of an intraday chart for gold hints we may be in the middle of wave 3 lower of a larger impulse wave. This downward impulse hints at continued weakness towards $1285. Student of Elliott Wave Theory will recognize that in an impulse, there is still an outstanding fourth and fifth wave to follow.
The IG Client sentiment reading for gold is at +2.3. The number of trader’s net long gold is beginning to increase again. This could be a clue for bearish traders as the sentiment reading has been increasing for the past week. Follow live trader positioning in gold.
Bottom line, look for gold prices continue its trend lower towards $1285. If gold prices print above the September 12 low of $1324, then we will need to re-evaluate the wave count.
Learn more about the Elliott Wave patterns by receiving our beginner and advanced Elliott Wave guides.
—Written by Jeremy Wagner, CEWA-M
Jeremy is a Certified Elliott Wave Analyst with a Master’s designation. These articles are designed to illustrate Elliott Wave applied to the current market environment.
Discuss this market with Jeremy in Monday’s US Opening Bell webinar.
Follow on twitter @JWagnerFXTrader .
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Recent Elliott Wave articles by Jeremy:
USDJPY Advance May Kick Off a New Uptrend
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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