We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Bullish
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • RT @economics: Powell steers for economic soft landing thwarted twice by Trump https://t.co/acNsqxTPDi https://t.co/aJVYgrwEfx
  • 🇦🇺 AUD Westpac Consumer Confidence (DEC), Actual: -1.9% Expected: N/A Previous: 4.5% https://www.dailyfx.com/economic-calendar#2019-12-10
  • Heads Up:🇦🇺 AUD Westpac Consumer Confidence (DEC) due at 23:30 GMT (15min), Actual: N/A Expected: N/A Previous: 4.5% https://www.dailyfx.com/economic-calendar#2019-12-10
  • $GBPUSD: Cable Drops as Conservative Lead Over Labour Fades - YouGov Poll https://www.dailyfx.com/forex/market_alert/2019/12/10/gbp-usd-british-pound-sterling-uk-election-yougov-poll-brexit-latest.html
  • Certainly a podcast I'm going to be tuning into! https://t.co/56LBcaXLLU
  • Instead of my weekly equity webinar tomorrow, I'll be on the @DailyFX podcast with @JStanleyFX discussing our outlooks for 2020 on a variety of assets and currencies I'll have a link here once it's posted
  • $GBPUSD Daily Pivot Points: S3: 1.3056 S2: 1.3104 S1: 1.3124 R1: 1.3173 R2: 1.3202 R3: 1.325 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Pound headed lower still following a tighter-than-expected YouGov poll $GBPUSD https://t.co/atLO5AFDxN
  • Pro-risk #AUD joining the drop in #GBP (vs anti-risk #USD, #JPY) after the latest YouGov poll showed a hung Parliament within margin of error highlights the threat of cross-market volatility if election expectations don't go as planned #UKElections2019 - https://t.co/nTRoN36GUA https://t.co/dqznmCy5Xb
  • #GBPUSD plummets after new polls reveal Prime Minister Boris Johnson's Conservative Party is projected to win a smaller majority than previously anticipated. - BBG #Brexit #UKelection2019 https://t.co/PGMUcmS4le
What Does a Flat Pattern Illustrate for Gold Prices?

What Does a Flat Pattern Illustrate for Gold Prices?

2017-04-12 19:17:00
Jeremy Wagner, CEWA-M, Senior Strategist
Share:

Talking Points

-Elliott Wave flat patterns correct sideways and tend to be shallow

-Gold prices appear to have just finished an expanded flat correction

-While prices are above $1247, gold prices may continue to break higher

In Elliott Wave Theory, flat patterns are consolidation moves that are designed to eat up more time than price. Flat patterns tend to be shallow retracements of the previous trend and when finished, can lead to a breakout higher.

Today, we will study gold prices as an example of a running flat pattern.

Gold prices have been steadily rising for the past 30 days increasing nearly 7%. Prior to the recent break higher, gold prices were consolidating sideways in a very shallow retracement.

The correction in the blue a-b-c clearly illustrates a three wave move. In Elliott Wave Theory, three wave generally form against the direction of the main trend. Therefore, a three wave pause after a strong run up fits into the Elliott Wave model.

There are some guidelines we can use when targeting the ending point of wave c in the flat. Many times, alternating wave have equality or Fibonacci relationships to one another. In this case, wave c would equal wave a near $1249. The low on April 10 came in at $1247.

Now that we have a corrective pattern identified, let us see how it fits into the bigger picture so we can estimate the next leg higher.

Prior to the blue a-b-c- running flat correction, we have an impulse move of five waves. Since this impulse began a new trend, we can look for another five wave move of Fibonacci proportion OR of equal wave measurement. The level where wave ‘c’ is 61.8% the length of wave ‘a’ is at $1289. The equal wave measurement is near $1313.

Therefore, our flat pattern remains valid and integral to this analysis so long as gold prices remain above $1247. Our near term targets of $1289 and $1313 fit within the longer-term analysis produced when we asked the question can gold prices rally with the Fed raising rates?

Interested in expanding your understanding of Elliott Wave Theory? Grab our beginners and advanced Elliott Wave guides where the various patterns are illustrated for you to review.

If you want to see Elliott Wave in action, then join Jeremy for his US Opening Bell webinars to discuss the current patterns for gold and other main markets.

Gold Price Intraday Chart

What Does a Flat Pattern Illustrate for Gold Prices?

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

To receive additional articles from Jeremy via email, join Jeremy’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.