Two weeks ago I wrote about two harmonic patterns playing out in the Gold chart here. At the time, the bearish Deep Crab had retraced 78.6% of the pattern and was still sinking. The bullish Shark had not yet completed, but would do so at the same level as an 88.6% retracement in the Deep Crab.
This was also right around the prior support level at 1140. Look what happened:
You can see that the 88.6% level at 1140 did stop the retracement in the Deep Crab. Like magic.
Now Gold is reversing back higher. The retracement of the down leg is seen in the red Fibonacci lines. What it expresses is that there are now tight ranges to look for on a retracement higher, from reviewing the down leg. The first is 1198.17 to 1204.99, and the second 1219.16 to 1224.62. The third comes at 1240 to 1244. These all align well with prior resistance support levels at 1200, 1225 and 1245.
With the bullish Shark in control, we see the first target retracement has been met at 1198.17, a 38.2% retracement. Continuation from here would target a move to the 61.8% retracement at 1240.03. A move over 1205 should give some confidence to the possibility of the 1240 level.
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