AUD/USD Longer Term Correction Resuming?
AUD/USD stalled after grabbing two year highs on July 27. Looking at the bigger picture Elliott Wave model, we can count the sideways correction as complete and AUD/USD is at risk of continuing its longer term downtrend.
Do you struggle with your trading? This could be why.
On September 2015, AUDUSD began to correct higher the losses it sustained over the previous four years. The Elliott Wave model we are following shows a complex correction consisting of an expanded flat, triangle, and zigzag. About the only thing missing in this upward correction has been the kitchen sink.
More specifically, we are counting the Sept 2015 to July 2017 correction as a W-X-Y complex correction. The ‘W’ wave is listed as an expanded flat. This is because we saw a brief overthrow in early 2016. This wave was followed by an ‘X’ wave triangle. The triangle lasted from April 2016 to May 2017. Then, the ‘Y’ wave is a listed as a brief zigzag.
If this pattern holds, then we can anticipate a large sell off to begin from nearby levels and retest 68 cents. IG Client Sentiment is running at -1.51 that is higher than readings we have seen recently. If this sentiment reading continues to increase, then it would be symptomatic of a bearish turn in price that would line up with the Elliott Wave model. See how live traders are positioned in AUDUSD here.
Three DailyFX analysts selected the Australian Dollar as their top trade for 2017. Read pages 13, 18, 20 of DailyFX’s Top Trades of 2017.
Elliott Wave resources:
Webinar recording on Flat patterns, how to read and trade them.
Webinar recording on triangle patterns, how to read and trade them.
Webinar recording on zigzag patterns, how to read and trade them.
---Written by Jeremy Wagner, CEWA-M
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