Gold: Expect Further Downside Action After Aimed 1240 / 1250

Gold peeked to 1347 high then plunged at 1282 low. We made a correction below 50% fib level at 1311 high followed by aggressive selloffs on Thursday with 1292.78 low and closed at 1295.93 forming a bearish engulfing daily candle. I was watching for 1314 or 1323 ( 50% & 61.8% levels ) to short it but we failed and instead of that, we got only 1311 high.

On RSI we made three drives showing a divergence validating wave 3 and ending wave 5 at 1347.
We broke mini ascending red channel.
We broke RSI blue ascending channel .
We dropped below 40 level on RSI daily indicating bearish cycle.

On MACD we also have divergence in red arrow.
We broke resistance trend line on MACD blue color and dropped below zero level, also indicting a bearish cycle.

Conclusion: Wave A impulse 5 / B corrective 3 waves zigzag / Technically wave C that should follow is 5 waves downward.
I am looking for a test at 1282 and I highly doubt it will hold. If we break it then ABC zigzag because wave C must be 5.

Next levels gold will drop to are: 1282 / 1264 (1.272% extension) / 1254 (1.414% extension ) / and potentially 1240+ ( 1.618% extension golden ratio which also at the blue rising trend line of lower channel.)

Recommendation: sell at 1300 1303
SL 1312
TP 1282 1264 1254 1240+

You can sell and close half positions at 1264 or 1254 and move TP of other half to 1285 (Risk management)
You can sell and close half positions at 1282 / if we break 1282 increase short volumes ( Risk management)
You can sell and keep positions till 1264 1254 and once we break 1282 add more volume / once we break 1264 add more half volume of breaking 1282 and close at 1254 with SL 1272. ( risk management)

You can do many successful strategies if your have the right technical and clear picture.
Technical IndicatorsTrend AnalysisWave Analysis

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