Gold – Bearish Minute ii - Divergence

GOLD indeed delivered the previously projected Bullish Rally posted as “Gold – Bullish Impulse – Minuette (iii) – Trend Reversal”.
Since then, GOLD punched through multiple Resistances but now it seems like there could be considerable signs of Bullish exhaustion, with Volumes Divergence.

It looks like there is still a bit more room on the Up-Side as the Bearish Divergence does not seem to be complete. However, GOLD is now trading exactly at the upper Trend-Line of the Triangular Pattern pointed out previously, for more details please see the Long-Term Analysis posted as “GOLD (XAU/USD). Bullish Primary C. Powerful Impulses. Long-Term”.

The Bearish Levels in focus are 1270.00 & 1286.00. Let’s see why!

GOLD / XAUUSD - 2H Chart:

Minute i (blue) – Wave Count and Bullet-Points:

• Minuette (i) (black) unfolded as a Wedge, showing Price Action indecision which is typical for this wave.

• Minuette (iI) (black) corrected Minuette (i) (black) with a Zig-Zag, confirming the Inverted Head & Shoulders Pattern which was mentioned previously as well.

• Minuette (iii) (black) is well known for its power and this is exactly what we saw, a 200% reading on the Fibonacci Extensions of Minuettes (i) & (ii) (black).

• Minuette (iv) (black) retraced towards 38.2% Fibonacci Retracements of Minuette (iii) (black).

At this stage, with Traders getting FED Rate Statement out of the picture, new swings can be unlocked.

Minuette (v) (black) – Speculation & Projection:

There is a possibility that XAUUSD could finalize Minuette (v) (black) and thus the complete Cycle for Minute I (blue) at or around either 1270.00 or 1286.00.
The preferred scenario would come from a Bearish Divergence confirmation, typical for a 5th wave, pointing a Wave Trader towards a better direction.

Minuette (v) (black) – Fibonacci Projections:

• 1270.00 Levels represent 261.8% Fibonacci Extensions of Minuettes (i) & (ii) (black).

• 1270.00 Levels also represent 61.8% Fibonacci Extensions of Minuettes (iii) & (iv) (black).

• 1286.00 Levels represent 341.4% Major Fibonacci Extensions of Minuettes (i) & (ii) (black).

• 1286.00 Levels also represent 100% Fibonacci Extensions of Minuettes (iii) & (iv) (black).

XAUUSD – Bearish Levels in Focus:

•    Aggressive – 1270.00
Invalidation – 1282.00 (or higher, depending on individual)
Target – 1248.00
•    Moderate – 1286.00
Invalidation – 1296.00
Target – 1248.00

To be noted that the Moderate Level would be more appropriate since GOLD is well known for having extended 5th Waves.

Safety Measures:

• When in the green, moving SL to break-even or in profit.

• If Conservative, one would wait for a Bearish Divergence confirmation, a possible Rising Channel Breach or Flag Formation.

* The above Analysis does not act as a direct investment advice and should be treated as market commentary.

Many pips ahead!
RT