Article By RoboForex.com
Analysis for October 22nd, 2014
In our previous review, “An ascending correction continues. Wave analysis of XAU/USD for 16.10.2014”, we discussed one of the possible scenarios how the price may continue forming an ascending correction iv of (v).
The last ascending correction on the H1 chart has transformed from zigzag into a possible wedge (i) of [a], thus changing the wave structure. If this assumption is correct, then after a descending correction (ii) of [a], the uptrend may continue inside impulse (iii) of [a].
Possibly, the pair has already finished a large descending zigzag A and started forming the first “leg” [a] of B of an ascending zigzag B, which may take the form of an impulse.
The predicted target of the possible ascending zigzag B may be at level of ~1500 (or ~1800).
However, an alternative scenario may be still in effect. It implies that the price may be still forming horizontal triangle (iv) of [c] of A. In this case, the uptrend may be completed by zigzag e of (iv) near ~1300.
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The main scenario on the weekly chart suggests that several large zigzags formed around a virtual horizontal axis may form a long horizontal correction (4).
Statistically, the fourth waves of impulses take the form of long horizontal corrections or flats, and the first of them usually start with such deep zigzags like the ones shown on the figure.
However, at the same time one should remember that any possible scenario is subjective and the market may move in a completely different direction.
RoboForex Analytical Department
Article By RoboForex.com
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
