An AB=CD pattern is setting up on gold, with an expectation of a mild retracement before continuing on its downtrend. The C point retracement of the AB leg is just below 0.382, and not being a perfect retracement does hurt the pattern's chances of accurate future prediction. Additionally, time symmetry is not good for this pattern, so we need to be wary when trading it.
The 3.14 BC Projection lines up closely with the equivalent AB=CD completion indicating that the reversal zone (red rectangle) does possess some harmonic resistance. The reversal zone also lines up with structure resistance, looking left.
Overall, gold has been in a downtrend on the daily and weekly charts, so I don't expect the market to turn around when this AB=CD completes. I only expect a small move upward before the market moves down further. Keep stops tight and targets reasonable.
It is important to emphasize that this trade shouldn't be entered with a limit order, but rather price action must be observed closely in the reversal zone for confirmation of a upward move in price. This could be a double bottom on a lower timeframe or a doji candle.
UPDATE: This pattern is not yet invalid, but it is not tradeable either. Since price never descended into the potential reversal zone, I did not take this trade. I would still wait for gold to come into the red rectangle, but time symmetry is definitely not there anymore.
UPDATE: Price has gone higher. I would consider the AB=CD to have not completed, but you could have gotten in on the swing low and made some profit. I expect gold to continue on a downtrend overall.
The 3.14 BC Projection lines up closely with the equivalent AB=CD completion indicating that the reversal zone (red rectangle) does possess some harmonic resistance. The reversal zone also lines up with structure resistance, looking left.
Overall, gold has been in a downtrend on the daily and weekly charts, so I don't expect the market to turn around when this AB=CD completes. I only expect a small move upward before the market moves down further. Keep stops tight and targets reasonable.
It is important to emphasize that this trade shouldn't be entered with a limit order, but rather price action must be observed closely in the reversal zone for confirmation of a upward move in price. This could be a double bottom on a lower timeframe or a doji candle.
UPDATE: This pattern is not yet invalid, but it is not tradeable either. Since price never descended into the potential reversal zone, I did not take this trade. I would still wait for gold to come into the red rectangle, but time symmetry is definitely not there anymore.
UPDATE: Price has gone higher. I would consider the AB=CD to have not completed, but you could have gotten in on the swing low and made some profit. I expect gold to continue on a downtrend overall.