AUSSIE Update II: The Corrective Stage

2 years ago 602 views 2 min read

Grega Horvat

Analyst

Forex Analytix

AUSSIE Update II: The Corrective Stage

I talked about Aussie resistance three weeks ago (click here) when pair was trading sharply higher, but I recognized pair in a fifth wave of an impulse, so a reversal is what we expected from an Elliott wave perspective. Keep in mind that after every five waves correction follows which are temporary structure, so I believe that current setback will sooner or later find a base. But looking at the 4h chart and that broken wedge suggests that correction is still ongoing.

The reason is an impulsive sell-off towards the first support at 0.6870 for wave A now, but we think there is room for a break below that level and possibly towards 0.66-0.67 after the wave B rally that is already trying to show a completed intraday corrective rise. That said, we are bearish in the short-term while the market is trading below 0.7158. But the long-term picture has not changed for me yet. I still think that pair has a attractive support for a bounce this year at 0.66/0.67 area as discussed in our past update.