Is it time for a downswing correction ?

OANDA:XAUUSD   Gold Spot / U.S. Dollar
Gold completed two harmonic ABCD patterns on the weekly chart. First harmonic AB = CD pattern in which the AB leg is from 1046 to 1375, and the CD leg is from 1122 to 1452. Second harmonic ab = cd pattern in which the ab leg is from 1160 to 1346, and the cd leg is from 1266 to 1452. That means the level 1452 is likely the reversal point for gold in short to medium term. Plus the RSI indicator is very overbought on weekly chart (the most overbought level in about 8 years, since September 2011 where gold reached all-time high at 1920). Even though gold has likely started a new bull phase, it looks like it is due to a downswing correction in short term at least. If this weekly candle confirms an inside bar pattern, the downswing correction might start as soon as next week. The strong weekly support zone is at 1360-1380 but a breakdown under that can take gold into a deeper correction that would shake out a lot of bulls.


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