Gold bulls in Pole position before US election

Gold (XAU/USD) is moving sideways in the 21 ema zone. But price action recently bounced at the Fibonacci support levels.

Price Charts and Technical Analysis

The XAU/USD is testing the 21 ema zone resistance. A bullish breakout above the Fractal and resistance trend line (purple) confirms the uptrend continuation (green arrows).

A bullish break increases the probability of a wave 4 completed plus the start of the wave 5 (pink). Price will be building a wave 1-2-3 (purple) within that wave 5.

Alternatively, a bearish break (orange arrows) below the 21 ema zone could confirm a larger bearish pullback. In that case, price will first aim at the 61.8% Fibonacci retracement level. Which is where the alternative wave 4’ could end.

A break below the 61.8% Fib (red arrow) changes the short-term outlook but not the long-term bullishness. In that case, we should see a wave 4 but of a higher degree and a larger price swing. The main target and support zone is the 38.2% Fib of the larger swing (blue box). The uptrend is only unlikely if price falls deep (red x).

On the 4 hour chart, price action could be developing a wave 1-2 (purple). This is invalid (red x) if price action breaks below the bottom (blue box). 

We are still expecting wave C (orange). This should complete wave 2 (purple). A bullish breakout and shallow flag would indicate, however, an immediate bullish breakout.

---

The analysis has been done with the ecs.SWAT method and ebook.