FX.co ★ AUD/USD wave analysis for January 18, 2013

AUD/USD Elliott Wave
Since our last analysis the AUD/USD pair was trading downward like we expected, impulsive wave (1) (coloured green) of the bigger (C) wave (coloured red) was developing. Yesterday during the Asian and European sessions we could observe strong ascending movement from 1.0496 toward the 1.0556 level (daily high). Therefore, during the early New York session the AUD/USD pair did not manage to hold around daily high and price start pushing lower reaching a 1.0507 level. At the moment this currency pair is trading around 1.0499 level and we expect to see the price lower for the next few 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 invalidation at 1.0598 level as stop loss.

Support and Resistance
(S3) 1.0418 (S2) 1.0455 (S1) 1.0501 (PP) 1.0538 (R1) 1.0584 (R2) 1.0621 (R3) 1.0667

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 1.0598 and take profit at 1.0123 are recommended.