AUD/USD Elliott Wave Analysis

AUD/USD will continue to gyrate inside 0.7827-0.8265 range for the rest of this month...

Aussie did continue to gyrate inside the range of 0.7827-0.8265 in a volatile manner this week and further choppy trading is still likely for the rest of this month, however, as long as 0.7827 support holds, we are retaining the view that wave 3 from 0.6248 will resume and a breach of said resistance will confirm and bring further gain to indicated 0.8292 level (1.618 times Fibonacci projection of 0.6007-0.7270 measured from 0.6248) and then 0.8383 (62% Fibonacci retracement of 0.9851-0.6007) in Q3, however, major resistance at 0.8520 ((22 Sep 2008) shall cap aussie's upside.

On the downside, a breach of 0.7827 may bring weakness to 0.7703 but below is needed to violate recent series of higher highs and higher lows from 0.6248 and bring a minor correction in wave 4 to around 0.7451, however, 0.7270 (wave 1 top) is expected to remain intact and yield wave 5 rally later in Q3.

The long-term uptrend started from 0.4775 (2 Apr 2001) with an impulsive structure. Wave I is labeled as 0.4775 to 0.8797 (24 Jun 2002), wave II has ended at 0.5231 (5 Aug 2002) and wave III rally was capped at 0.6828 (4 Jul 2003) with corrective wave IV was contained at 0.6364 (2 Sep 2003) before rallying to 0.9851 (15 Jul 2008) to end wave V. The subsequent sharp but short-lived selloff due to the derivative trading is viewed as a quick and simple A-B-C type of correction with wave A:0.7800 (17 Sep 2008), B:0.8520 (22 Sep 2008) and C finished at 0.6007 (27 Oct 2008). The rally from the major low of 0.6007 (27 Oct 2008) to 0.7270 (7 Jan 2009) suggests another uptrend is now unfolding, the impulsive upmove is tentatively marked as wave 1, the retreat to 0.6248 (2 Feb 2009) is seen as wave 2 and current rally is labeled as wave 3 and would extend to above-mentioned upside targets.