XAU/USD – Bullish Breakout & Wave 3 Expansion Imminent?

Gold appears to have completed a corrective Elliott Wave structure (A)-(B)-(C) within a contracting wedge pattern, followed by a bullish breakout signaling the beginning of a new impulsive wave cycle.

🔹 Wave Structure Overview

The corrective decline formed a clear ABC correction inside a falling wedge, marked in red.

Following the final touch on the wedge's lower boundary, we saw a 5-wave impulsive breakout—suggesting the end of correction and initiation of a larger degree impulse wave.

Subwaves (1)-(2) appear to have completed in the new uptrend, with Wave (3) currently in motion.

🔹 Fibonacci Extension Targets for Wave (3)
Using the Fibonacci extension from the base of Wave (1)-(2):

1.13 Extension = $3,517

1.272 Extension = $3,551

1.414 Extension = $3,585

1.618 Extension = $3,635 (Primary target for Wave (3))

These are key resistance levels to watch as price progresses higher.

🟢 Bullish Scenario

A sustained break above recent resistance (~$3,345) should trigger momentum toward Wave (3)’s target range.

Price action and structure support a move toward $3,550–$3,635 in the coming days.

Minor pullbacks (Wave 4) expected before the final move into Wave 5 completion.

🔴 Bearish Invalidations

If price breaks below the current Wave (2) low (~$3,240), the bullish impulsive count may be invalidated.

Invalidation of the impulsive structure would imply either a deeper correction or re-entry into range-bound consolidation.

📌 Conclusion:
Gold is showing strong bullish momentum post-correction with a potential extended Wave (3) in progress. Breakout traders can look for continuation setups above $3,345 with targets at the Fibonacci extensions noted. Risk should be managed below Wave (2) low.

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