AUD/USD Elliott Wave Analysis

AUD/USD = Correction from 0.8265 ended at 0.7777 upmove should resume towards said resistance

The rebound from 0.7777 (23 June) signals the wave iv correction from 0.8265 (wave iii top) has ended there and although aussie has retreated from 0.8156, pullback should be limited to 0.7980/90 and bring another rally, however, break of 0.8238 resistance is needed to confirm this view and bring another attempt to 0.8265, then to the wave C target at 0.8292 (1.618 times Fibonacci projection of A-leg 0.6007-0.7270 measured from B-leg trough at 0.6248). Having said that, as indicated in our labelling on the daily chart, this should be the final wave v of this C of larger degree wave (B), upside should be limited to 0.8383 (50% Fibonacci retracement of 0.9851-0.6007) and major resistance at 0.8520 (22 Sep 2008) should remain intact.

On the downside, pullback should be limited to 0.7980/85 and bring upmove to abovementioned upside target. A daily close below this level would signal the wave (1) of larger degree wave v has ended at 0.8156 (instead of 0.8088), then correction in wave (2) would bring further fall to 0.7921/29 (61.8% Fibonacci retracement of 0.7777 to 0.8156 and previous minor support) but support at 0.7827 should contain aussie's downside and bring another rally later this month.

To re-cap the current bullish count on aussie, the rally from 0.6007 to 0.7270 (7 Jan 2009) is tentatively marked as wave A, the retreat to 0.6248 (2 Feb 2009) is seen as wave B and the subsequent upmove is labeled as wave C and formed a temporary top today at 0.8265 (minor wave iii), above would extend to 0.8292 and possibly towards 0.8383.

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 corrective fall from last year's high of 0.9851 (15 Jul 2008), the quick and fast selloff was mainly due to the derivative trading and therefore, we are treating the decline as a simple A-B-C type of consolidation with A: 0.7800 (17 Sep 2008), B: 0.8520 (22 Sep 2008) and wave C has ended at 0.6007 (27 Oct 2008) which formed a larger degree wave (A).