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  • The latest CFTC positioning data for the week ending March 2nd saw speculators continue to unwind their US Dollar net shorts. Get your market update from @JMcQueenFX here:https://t.co/S3Kx4OBphE https://t.co/fejOV0AXYv
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Gold Prices Bounce to Resistance while Dollar Index Corrects

Gold Prices Bounce to Resistance while Dollar Index Corrects

Jeremy Wagner, CEWA-M, Head of Education

Gold prices bounced last week into $1320 resistance zone. We are anticipating another retest of $1302 while Dollar Index corrects its up trend.

The video above is a recording of a US Opening Bell webinar from May 14, 2018.

Elliott Wave Analysis for Gold

The larger trend in gold prices appears incomplete to the upside while the near term trend appears incomplete to the downside. Therefore, we are anticipating a move to the downside in gold prices to clear $1302 in wave (c) of ((b)). This final dip would put the final additions on a sideways Elliott Wave flat pattern that began January 25 and subdivides (a)-(b)-(c).

Gold price chart with Elliott Wave analysis included.

Once a flush out below $1302 completes, we are then anticipating a wave higher to retest $1365. While the US Dollar index is has been trending higher lately, gold has been trading sideways. This type of behavior suggests some underlying strength below gold’s surface. We can see this strength in the gold chart below as gold priced in US Dollars (blue line) is near the top of the chart.

Gold priced in major currencies showing relative strength of gold.

Crude Oil Stares Down Several Wave Relationships in $71-$74

Crude oil prices continue to hang near recent highs. We commented on Friday how the longer-term crude oil price patterns nears a terminal point with some wave relationships in the $71-74. The price action since then has not altered our top views in that a reversal in trend may be near if the top has not already been seen.

If a reversal in crude oil prices takes hold, then we may see a deep correction in the latter part of calendar year 2018.

Elliott Wave analysis for crude oil forecasting a long term top.

Dow Jones Industrial Average Bearish Picture Hangs By a Thread

Dow Jones Industrial Average (DJIA) price chart still holds below a key level near 25,825. As a result, it is still technically bearish though the recent bump higher is beginning to press wave guidelines for a bearish pattern.

Below 25,825, we will keep the door open for a bearish resolution that may drive down towards 20,000. Otherwise, above 25,825 the door is open to new all-time highs.

Dow Jones Industrial Average chart with Elliott Wave labels.

US Dollar Index Elliott Wave Chart

For the past couple of days DXY (US Dollar Index) has been trending lower. The Elliott Wave pattern we are following appears incomplete to the upside so we are viewing weakness in this market as temporary.

It would be common for DXY to dip down to 91.50 - 92.00 and for the current up trend to remain impulsive.

If DXY does end up dipping below 91.50, we still view the higher probability pattern is an eventual move higher to 95-98 though the start of such a move may be delayed.

US Dollar Index chart with Elliott Wave labels.

Elliott Wave Theory FAQs

What are Elliott Wave impulse waves?

According to Elliott Wave Theory, the market moves five waves in the direction of the near term trend followed by a three wave counter trend wave. An impulse wave is one of two types of motive waves that denotes trend direction. Therefore, if we see a bearish impulse waveform, then after a three-wave counter trend wave, we can anticipate at least one more bearish motive wave.

For those Elliott Wave technicians looking for further study, read about our expert tips in our beginners and advanced trading guides.

After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.

What is the biggest mistake traders make?

Regardless of the style of analysis, many traders do lose money because they do not take the time to study the market and the effect of leverage. At DailyFX, we have studied millions of live trades and boiled our study down into a Traits of Successful Traders guide. You will find how leverage and human nature affects our trading so you can be better prepared for the next correction.

Elliott Wave Theory can be applied to a variety of highly liquid markets. FX is one of my favorite markets to apply the Elliott Wave principle. Learn more about trading FX with this guide specifically designed for you.

---Written by Jeremy Wagner, CEWA-M

Jeremy Wagner is a Certified Elliott Wave Analyst with a Master’s designation. Jeremy provides Elliott Wave analysis on key markets as well as Elliott Wave educational resources. Read more of Jeremy’s Elliott Wave reports via his bio page.

Communicate with Jeremy and have your shout below by posting in the comments area. Feel free to include your Elliott Wave count as well.

Discuss these markets with Jeremy in Monday’s US Opening Bell webinar.

Follow me on Twitter at @JWagnerFXTrader .

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

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