Let’s follow up on the previous harmonic pattern that we had identified on the 4hr time frame of Gold.
This is the bullish Gartley pattern that had completed & we were expecting price to rally to fulfill the price objective of this pattern.

As we can see, price did fulfill the objective of this pattern.

At this stage price seems to be in a consolidation stage and we are not sure about the direction its going to take.
As always, let me repeat myself.
We are traders and not astrologers. We do not predict price movement, but use our analysis tools to set certain levels.
And follow the “If-Then” principle. We allow price to make its moves & follow it.
The advantage is that our trade parameters are pre-defined, hence giving us a “Plan”

Looking at the daily time frame, this up move (which fulfilled the price target of the 4hr bullish Gartley) has given rise to some other harmonic patterns -
Alternative.1 - We could be looking at a possible bearish Gartley in the making….IF price finds resistance at “B” (the 61.8% of X-A)

In that case, we can expect price to form the third wave B-C of the harmonic pattern. If we concern ourselves with only this move, then we have a definite price objective to the downside.

Alternative. 2 -
We could also be looking at a bearish Bat pattern, where the last wave C-D has yet to be completed.

So, if price breaks the 61.8 level (of X-A) then we can expect moves to the ‘D’ level of this pattern.
Conclusion -
We don’t know if price will move up or down, but we have defined our levels and will follow price. The advantage of using harmonic patterns is that price seems to respect the Fib levels quite precisely and we can expect a high probability that these objectives would be met.
And if they do, then we can also plan further moves, since we have the next wave already defined.
Sunil.