In our last technical commentary, we discussed about a completion of a acting as a springboard to a potential rally (see discussions and additioanl charts here: https://www.tradingview.com/v/HJ5t8w6p/).
What was confounding to this potential rally was the absence of two discreet, but technically crucial events:
1 - Internal count that demanded a 5th wave impulsive move
2 - A predictive/forecasting model that remained unanswered via a narrow target range (1255.16 to 1255.73) defined on SEP 5th.
Combining both the elements of a missing segment and that of a pending predictive/forecast were two strong reasons to hold any aspiration.
Now that these events have completed, other targets generated by the same predictive/forecasting model are offering themselves to a potential rallying, IF it were to happen. I say this cautiously because all is not well with gold , and only a technical ground is used here to carry this outlook to concrete heights.
Lower targets are complete. I caution the trader to target his/her own overhead targets with a tight SL, and pace any advance based on 0.214, 0.382, 0.500. 0.618, 0.786, and 0.886 levels.
Independent of this Fib-pacing, the model has generated the following targets:
1 - TG-1 = 1301.76 - 05 SEP 2014 (Quant-Target with MOD prob of hit + LOW retracement potential)
2 - TG-Hi = 1321.71 - 05 SEP 2014 (Qual-Target with LOW prob of hit + HIGH reversal potential.
Predictive Analysis & Forecasting
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* * * NEW Major Banks' FX Position * * *
Re: $AUD - Considering the high correlation between $AUD and Gold, you might enjoy knowing that some major banks are quitting bearish positions on a SHORT-TERM basis
Credit Suisse entered $AUDUSD Short via filling a limit order at 0.92 (Short-Term)
(Forex intel: https://www.tradingview.com/chat/#xsmm44S00HaO5wCZ )
The model remains weighed down by piles of dead bulls.
Here is how I would play this one:
1 - Let $XAUUSD rally to above the 1-3-5 Line: This will prompt the current sellers to get wrung out of the retail market side.
2 - Allow price to cross ABOVE the 2-4 Line and fall back upon its upper side as a once-resistance/now support directional conversion signal
3 - Take a long side with SL at the 1-3-5, and then a Fib-pacing as indicated in the text.
I do not trade metal, simply charting them as I would look at a weather-vane in terms of risk and Forex correlations.
$USD had its days, and this may herald a reversal in the majors, on the back of a weakening dollar.