FX.co ★ AUD/USD Wave Analysis for July 17, 2012

AUD/USD Elliott Wave
Since our last analysis the AUD/USD pair was trading in an upward move developing impulsive wave 1 (coloured blue) of the bigger wave (3) (coloured green). During the early European session we could observe a descending movement towards the 1.0204 level and we can consider this move as the end of the corrective 4 wave (coloured pink). Therefore, during the New York session the AUD/USD pair did not manage to hold this level and the price pushed higher. Today we could observe continuation of the bullish mood and the price is currently trading around 1.0300 level. In accordance with our wave rules and taking into account that the wave 2 retraces 61.8% of the wave 1, we can define the potential targets with Fibonacci Retracements (1.0098-1.0327) with Take Profit 1 at 1.0209 (50% of wave 1) and Take Profit 2 at 1.0183(61.8% of wave 1). Resistance point at 1.0350 can be used as Stop Loss point. Also it is necessary to monitor the U.S. Core CPI m/m, CPI m/m, TIC Long-Term Purchases, Capacity Utilization Rate, Industrial Production m/m and Fed Chairman Bernanke Testifies data that can change the rate of the pair.
Support and Resistance
(S3) 1.0179 (S2) 1.0201 (S1) 1.0214 (PP) 1.0236 (R1) 1.0258 (R2) 1.0271 (R3) 1.0293
Trading Forecast
Proceeding from Elliott Wave rules this week, the trend is expected to begin the downward movement. That is why short positions at level 1.0320 with Stop Loss 1.0350 Take Profit 1 at 1.0209 and Take Profit 2 at 1.0183 are recommended.