In our March 10 analysis, we mention that XAUUSD might have topped its wave i (see Daily Chart) but circle wave 5 had an ending diagonal structure that needed one higher high to complete (see 1h chart below):
XAUUSD 1h – March 10
Even though we believe that XAUUSD does not have any other major fundamental news to support its upside and the current impulse move from the lows was fueled by the weakening of USD due to recent FED interest rate decisions.
Previous and current charts of XAUUSD leave an opportunity for the pair to make a higher high by targeting the upper bound of the channel (see updated chart below):
This is a clear bullish channel that targets $1295-$1305 price area on the upside with the condition that the lower-bound ($1235) of the channel must not be broken. This blue wave 5 might take the form of an a-b-c move towards the targeted region with red wave a and b being completed.
Buy Limit Orders at the 50% (1248.62) (1/2 of size) and 62% (1243.36) (1/2 of size) retracement levels with
Stop Loss = $1238.00
Target = $1280.00