AUD/USD Elliott Wave
Last week the AUD/USD pair was trading downwards, just like we expected, impulsive wave 1 (coloured blue) of the bigger wave [5] (coloured red) was developing. During the Friday's Asian and European sessions we could observe descending movement from 0.9182 towards the 0.8999 level and we can consider this move as the end of 1 wave (coloured green) of 3 wave (coloured blue). Therefore, during the New York session this major currency did not manage to hold these highs and the price has retraced back to 0.9075 level. At the moment the AUD/USD pair is trading around 0.9095 area and we expect to see the price lower when development of the wave 3 (coloured green) starts. In accordance with our wave rules and taking into account that wave 3 should retrace 161.8% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 0.8829 (161.8% of wave 1). To reduce the risk, we can use invalidation point at 0.9300 level as stop loss.
Support and Resistance
(S3) 0.8775 (S2) 0.8886 (S1) 0.8967 (PP) 0.9078 (R1) 0.9159 (R2) 0.9270 (R3) 0.9351
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 0.9000 with stop loss at 0.9300 and take profit at 0.8829 are recommended.
