By Orbex
The current XAUUSD reversal at the swing high suggests that we have now ended the super-cycle wave (b).
Like any other corrective pattern, it took the form of a 3-wave structure. In this case, this is a standard zigzag which consists of cycle degree waves a-b-c.
Wave c completed with a false break above the $1700 handle. Since wave (a) was an impulse, this is expected to remain the case for wave (c) too.
At the time of writing, price action is indicative of more weakness in primary wave ①. This impulse move consists of intermediate waves (1)-(2)-(3)-(4)-(5).
With impulse (4) done, (5) could be completed soon. The $1420 makes a good test as it is the 161.8% Fibonacci extension of wave (3).
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The current impulsive decline can, however, take a multi-degree pattern to lower lows.
This alternative view finds the primary impulse wave ① significantly lower, and the former primary ① as intermediate wave (3).
The extended decline in the intermediate waves (5) can be expected to continue near the $1350 area. But if there, bears will be encouraged to push to lower levels too.
By Orbex
