Despite the fact that the smallest time frames are the ones you can rely the least on, they often provide some good examples of market behavior, governed by Fibonacci ratios. This is exactly what we may have on the 5-minute chart of gold below.
First, there is a sharp wave A, which should be counted as an impulse. Second, there is a three-wave retracement, contained between the two parallel lines of a corrective channel. And third, wave Y of B is approaching the 61.8% Fibonacci level, which often serves as a strong resistance for second waves. If this is the correct count, gold prices may start a new decline for wave C soon. This intraday setup would be invalidated, if gold goes above the top of 1231.15.
