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
zigzagA and started forming the first “leg”
[a] of B of an ascending
zigzagB, which may take the form of an impulse.
The predicted target of the possible ascending
zigzagB 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
zigzage of (iv) near ~1300.
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