FX.co ★ AUD/USD Wave analysis for January 03, 2013

AUD/USD Elliott Wave
Since our last analysis the AUD/USD pair was trading in a slightly downward movement like we expected, impulsive (1) wave (coloured pink) of the bigger 1 wave (coloured blue) was developing. Yesterday during the Asian and European sessions we could observe strong ascending movement from 1.0410 toward the 1.0523 level and we can consider this move as the end of the corrective (2) wave (coloured green). Therefore, during the New York session the AUD/USD pair did not manage to hold this level and the price started pushing lower reaching a 1.0474 level (end of the 1 impulsive wave). At the moment this currency pair is trading around 1.0510 level and we are expecting to see the price lower when development of the (3) impulsive wave (coloured pink) starts. 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 1.0444 (161.8% of wave 1). To reduce the risk, we can use invalidation at 1.0523 level as stop loss.

Support and Resistance
(S3) 1.0317 (S2) 1.0374 (S1) 1.0409 (PP) 1.0466 (R1) 1.0523 (R2) 1.0558 (R3) 1.0615

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.0490 with stop loss 1.0523 and take profit at 1.0444 are recommended.