XAUUSD 1M1. Elliott Wave Analysis
Wave 5 Completion at 1.618 Extension (2,747.14): The chart shows Wave 5 peaking at $2,747.14, corresponding to a 1.618 Fibonacci extension. This level is typically a significant reversal point, suggesting potential for a corrective move downwards.
ABC Corrective Pattern Projection: After the completion of Wave 5, an A-B-C correction is projected. The expected trajectory shows a downward movement to the liquidity void zone, followed by a potential retracement up in a Wave B before a final decline in Wave C.
2. Wyckoff Distribution and Accumulation Phases
Phase B (Accumulation - $1,046.23 to $1,920.80): This region marks the accumulation phase with a Sign of Weakness (SOW) in Phase B, where price forms a base before starting the upward trend. Notably, price action within this phase shows consolidation, preparing for a breakout.
Phase C (Mark-Up): After the accumulation, price enters the mark-up phase, breaking past resistance and forming new highs. This phase is highlighted by significant upward momentum, taking the price into higher Wyckoff distribution phases.
Distribution Pattern in Recent Highs: The recent highs around $2,747.14 align with Upthrust (UT) and Upthrust After Distribution (UTAD) signals, suggesting the end of the mark-up phase and a shift towards potential distribution.
3. Key Fibonacci Levels and Extensions
1.236 Extension (2,744.68): This level is another Fibonacci extension associated with Wave 5, acting as a point of possible reversal. Volume divergence at this level further indicates potential weakness in upward momentum.
0.618 Retracement (Inducement Wave 4): A 0.618 retracement from the previous lows serves as a key support level. If price retraces here during the corrective phase, it may offer a possible entry for continuation trades.
4. Liquidity Zones and Order Blocks
Liquidity Void (3M): There’s a liquidity void in the three-month time frame, which price might revisit during the corrective move. This void represents an inefficiency where price could fill gaps created by the upward trend, making it an area of interest for re-entries.
Buy-Side Liquidity (BSL): The Buy-Side Liquidity area near the recent highs includes stop losses and limit orders, making it a zone where institutional players might target liquidity.
5. Support and Resistance Levels
Resistance Line - BC Distribution (1,920.80): This level acts as a strong resistance line in the accumulation phase. If price revisits this area, it may encounter selling pressure.
Support Line - AR Distribution (1,525.84): The support around $1,525.84 represents the Automatic Rally (AR) point in the Wyckoff structure, marking a potential level of demand if price retraces to this level.
6. Break of Structure (BOS)
BOS in Wave 3 (12M): The Break of Structure in Wave 3 on the 12-month chart indicates a potential shift in the trend’s momentum, suggesting possible trend continuation or reversal.
BOS within Phase B (3M): Another BOS is marked in Phase B, highlighting a structural shift in sentiment. This often leads to an uptrend or a change in market direction as the BOS level confirms a key pivot point.
7. Dealing Ranges and Key Points of Control (POC)
Dealing Range (12M-3M): This range, spanning the recent swing highs and lows, establishes boundaries within which price is expected to fluctuate. The Point of Control (POC) within this range often corresponds with areas of high volume, which could act as pivotal zones for price movement.
Current Trend (Dealing Range for Wave 4): The range defined for Wave 4 provides insight into ongoing price action. Watching for breakouts or breakdowns within this range could indicate the next potential trend direction.
8. Proposed Trading Plan for Upcoming Weeks
Short-Term Correction Expected: With Wave 5 likely completed, a corrective A-B-C structure appears probable. This suggests a short-term downtrend toward lower support zones.
Target Zones:
Downside: Potential retracements to $1,920.80 and $1,525.84 are key areas to monitor. These support levels could act as potential bounce points or re-entry zones if the price holds.
Upside Resistance: If price revisits the recent highs near $2,747.14, look for bearish setups, as this level may act as strong resistance in the corrective phase.
Volume and Divergence: Watch for volume divergence or signs of weakness at the 1.618 and 1.236 extensions to gauge the potential for continued reversal. This can provide additional confirmation for trend reversal setups.
Summary of Key Observations
Wave 5 completion at $2,747.14 suggests corrective phase ahead.
Wyckoff Distribution structure signals potential downside with liquidity voids targeted.
Key Support and Resistance zones at $1,920.80 and $1,525.84.
Expected A-B-C Correction aligns with price filling previous gaps and testing support.
