Fed’s hawkish policy to fight inflation is putting in a high in place on GOLD from an Elliott wave theory perspective. It’s also about the speculation of how many interest rate hikes may happen this year. However, if FED will suddenly turn out to be less aggressive then this will quickly stabilize the gold prices, but for now, it looks like the current tone will not change so metals have room for more weakness.
In todays analysis we will look at the Elliott wave correction; flat, and Elliott wave triangle pattern, which is in the middle of an higher degree Elliott wave impulse.
At the same time I am also looking at DXY (USD Index) that is trying to break out of an Elliott wave triangle and towards 100 level.
What is an Elliott wave triangle?
Elliott wave triangle is a special type of pattern that occurs within a higher degree trend. It’s a corrective pattern, a longer pause a five subwaves in a contracting range. We labeled the structure with A-B-C-D-E waves where each leg is made by three subwaves. The most important is A-D trendline which may give an indication of a completed pattern after the line is broken.