Gold is bullish, but be aware of deeper intraday pullback

Gregor Horvat Wavetraders

US Dollar Index - DXY remains under intraday bearish pressure at the start of the month and week, so we are definitely still bearish and expect more weakness, but it's early Monday and we may not see straight lines, thus still be aware of bigger or more complex intraday pullback before a bearish continuation. DXY could actually still be trading in subwave (b) and it can still see higher intraday resistance for subwave (c) of "ii", which can fill the GAP from May 18 before real bears show up. However, of course, if DXY breaks below 98 area decisively, then more weakness can be seen within wave "iii" of 5, unless it goes sideways for a higher degree bearish triangle in wave 4.

DXY one-hour chart

Gold is coming nicely higher for wave subwave »c« of a projected three-wave abc corrective recovery in wave B and it’s now testing key resistance, from where we may see another sell-off for a wave C of a higher degree wave (2), especially if we consider a new open GAP at 3925 level and then prevoius one at 3200 area, which can act as a strong support. However, if gold breaks straight above 3367 level decisively, then higher degree wave (3) can be already in full progress.

XAU/USD (Gold) one-hour chart

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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