FX.co ★ AUD/USD wave analysis for January 15, 2013

AUD/USD Elliott Wave
From the early September the AUD/USD pair was trading in an upward channel, corrective (B) wave (coloured red) of the bigger E wave (coloured purple) was developing. During the Monday's Asian and half of the European session we could observe ascending movement from 1.0521 toward the 1.0577 level where this currency pair found resistance. Therefore, during the second part of trading day the AUD/USD pair started pushing lower and the price retrace back to the 1.0540 level. At the moment this currency pair is trading around 1.0550 level and we expect to see strong bearish mood in the market for the next couple of weeks. In accordance with our wave rules and taking into account that the wave C should retrace 100% of the wave A, we can define the potential targets with measuring wave A with take profit at 1.0123 (100% of wave A). To reduce the risk, we can use the end of the D wave at 1.0624 level as stop loss.

Support and Resistance
(S3) 1.0499 (S2) 1.0520 (S1) 1.0533 (PP) 1.0555 (R1) 1.0576 (R2) 1.0589 (R3) 1.0611

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.5440 with stop loss and 1.0624 take profit at 1.0123 are recommended.