Gold: More Upside after a pullback

20 Apr 2023

US CPI came out better than expected last week at 5.0%, so we have seen some USD weakness at the start of the week, but then all of those losses got erased after FED officials said that there is room for another interest rate hike. Yields turend down, while USD is up which puts some short-term bearish pressure on the metals, that are now seen in a corrective set-back.

Looking at gold, we can count five waves up on the 4h time frame, a move that can be finished after recent wedge pattern and reversal down after the fifth wave. In fact, price broke the trendline support so we assume that correction has started, which should be made by three waves, and can be either dip, or sideways for a flat. In either case, we need to see A-B-C subwaves before the market can resume higher. Based on swing support and Fibonacci level, the ideal zone for a bounce is at 1934.