Elliott Wave Aussie

Hey Traders, we are in the new week of August, we can use that time to take a step back and ask, however well we did in August, how can we improve ourselves and to remember not repeat the same mistakes, learn and develop by tracking things in a trade plan. We are all still learning; the moment that we think that we know enough is when things start to deteriorate.

As you know the NFP came out on Friday and pushed Usd up and Eur down to recent new lows. If you were following my analyses last week, then you know about my first a-b-c scenario, I was targeting higher. Well, the trend surprised me a little after the -51k, but the market's eyes seemed to be directed on the fact that it was not as bad as expected. However, I still believe this move was the wave b, maybe this time an irregular b. There will still be enough time to trade this pair, but for now we need more data before getting involved again. Right now I am more focusing on Aud/Usd, especially after the ending diagonal shown below from November 2007. Ahead of the RBA rate decision at 00:30 EDT on Tuesday we are getting things planned.

AUD/USD

The Australian dollar was very strong against the U.S. dollar in the last ten months, with some crazy moves and new highs. This made a perfect ending diagonal, where the sub-waves are 3-3-3-3-3, and after this is complete are usually followed by a very powerful drop in a short period of time. In the next few weeks I am targeting the 0.8950 level, which is the low of wave b). Shown on the daily chart below we will also find some Fibonacci levels which could react as very powerful support areas in the future. I am talking about the 61.8% move from blue wave 2 and also 161.8% of the last a-b-c move in wave 5, which is in a “throw-over”. Throw-over means move above the upper resistance line. I believe that this move probably liquidated a lot of long-term traders from their positions. We will take a look on a smaller time frame to see where we are at the moment and what we can reasonably expect for today and tomorrow. These are busy charts, there is plenty going on, ready?

The two hour time frame shows a very powerful, and very fast drop in the last two weeks. So I made my impulsive count here to see where the end of it may be, and to start looking for a larger correction. As you can see I labeled this entire move down as wave 1), which could also be as possible wave B) in the future. However what I am seeing at the moment is that the bears should slow down a little with their strength and traders will start to book their short profit in the area around 261.8% of red wave I. The prices are also threatening the low of blue wave 4 of the diagonal, so I believe that we will see the correction in this zone. It would also be easy to see a move up near to the blue wave IV) where we have significant resistance zones, high of wave IV) and 61.8% of red wave IV. If we get there I would definitely like to be a seller in that area. So, we must be very patient in this zone. No new positions today, just the maintenance of whatever positions were initiated by the waves lower by those that took them, and wait for the RBA to do whatever they have to do.

Traders, I will see you tomorrow, Grega.

The LFB-Forex.com