I’m glad to provide you my latest Idea about Gold (XAUUSD). The last Idea was pretty accurate and definitely a profitable one. Nonetheless, price action changed a lot due to FOMC release, where we saw a fast increase in the price followed by a big sell-off to 1760 area during Asian Session.
What I noticed is that we built up a diagonal pattern, which often occurs in the first wave of a new impulse. A diagonal pattern is categorized in 5 waves in which every new impulsive wave, means wave 1,3 and 5, is shorter than the previous one – usually it takes the length of 0.618 or at least lesser than exactly the same of the previous. Here it is the case. The sell-off started at the 0.618 point of wave 5, which signals me a validation of the Diagonal.
So. Whats next?
I expect a correctiv pattern to occur, means ABC. I assume that currently we are building up B which tells me to book the profit we made with the last Analysis and look for possible short entries. I highlighted those possible Short position for you as always in grey. Stay calm, put your orders and don’t get trapped. This move looks like a big bullish move but is typical for a wave B movement which is followed by another sell-off – Wave C.