The Elliott Wave Analysis: Weakness Of Chinese Yuan Causes Sell-Off On Gold And Aussie
Metals, crude oil and some of the other commodities are coming down as the USD turns higher. More importantly, new lockdowns in China, and supply chains issues are having a bearish impact on the Chinese currency which is falling sharply, pulling down the Aussie with it.
Technically speaking the Aussie remains nicely bearish in the 4-hour chart as the pair seem to be starting to accelerate after breaking trendline support and also after a recent move out of a base channel as shown on the 4h chart. This is typically important evidence for an impulsive price action that we have been talking about for the last few weeks which is now in full action. If we are correct then wave (3) is now in progress towards 0.7. The invalidation level is now at 0.7343; as long this one hold, the trend is down.
Gold had lost correlation with the Aussie a few months back, but it appears that these two are now back in tandem. We see room on gold for 1820/1840, where wave C equals to wave A.
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
I would never sell my gold for Chinese Junk currency!