XAUAUD rallied from 2008 – 2011 followed by a pull back to 50 – 61.8 Fibonacci retracement zone in 2013. Since then it has been rallying again and now showing 5 swings up fro 2013 low which is in an incomplete sequence and make the instrument bullish against December 2015 low (1434) in first degree and April 2013 low in second degree. In our previous article “Gold: Will the rally extend or fail?”, we showed that instrument was ready for a pull back towards 1606 – 1565 area to complete the 6th swing i.e. blue wave (X). We have got the push lower that we were looking for and now in the area where buyers can start showing up. In case of further weakness, it could test 1590 – 1570 area before resuming the rally for new highs or bouncing in 3 waves at least as per the concept of Elliott wave hedging.
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