FX.co ★ AUD/USD Wave analysis for January 02, 2013

AUD/USD Elliott Wave
Last week the AUD/USD pair was in sideways trend, corrective wave (2) of the bigger (C) wave (coloured red) was developing. During the Monday's European session we could observe descending movement from 1.0408 toward the 1.0363 level. Therefore, during the early New York session this major currency did not manage to hold this level and the price started pushing higher reaching a 1.0404. Today during the Asian session the price continued trading in a bullish mood and the price reached a new high at 1.0497 level. We can consider this move as the end of the C wave (coloured blue) of the bigger (2) wave (coloured green) and we are expecting to see the price lower soon. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0164 (161.8% of wave 1). To reduce the risk, we can use invalidation at 1.0556 level as stop loss.

Support and Resistance
(S3) 1.0311 (S2) 1.0333 (S1) 1.0363 (PP) 1.0385 (R1) 1.0415 (R2) 1.0437 (R3) 1.0467

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.0470 with stop loss 1.0556 and take profit at 1.0164 are recommended.