Aussie made a sharp drop last week, which was expected as we were tracking final stages of an Elliott Wave ending diagonal within sub-wave c of B. Current drop can now be labelled as wave C of a higher degree B) correction, which can unfold as a big flat correction and can look for support, and a bullish reversal around the Fibonacci ratio of 50.0 or 61.8 (0.700/0.6910 region). That said, a later sharp rally in impulsive fashion would be first sign of a completed correction, and more upside.
AUDUSD, 4h
A Flat is a three-wave pattern labeled A-B-C that generally moves sideways. It is corrective, counter-trend and is a very common Elliott pattern.
Elliott wave flat pattern:
structure is 3-3-5
wave B terminates about at the level of the beginning of wave A
wave C terminates a slight bit past the end of wave A
appears in wave two or four, wave B in an A-B-C, wave X in a double or triple zig-zag, or wave Y in a triple threes
