FX.co ★ AUD/USD analysis for October 17, 2013

AUD/USD Elliott Wave
Since our last analyses, the AUDUSD pair has extend upward movements, corrective wave y (coloured blue) of the bigger wave A (coloured red) has been developing. Yesterday, during the Asian and European sessions we could observe ascending movements from 0.9497 towards the 0.9540 level. Therefore, during the New York session this major pair continued trading in a bullish mood and the price reached a new daily high at the 0.9567 level. We can consider this move as the end of the A wave (coloured red). At the moment, the AUDUSD pair is trading around 0.9535 and we are expecting to see more bearish movement in the next couple of days. In accordance with our wave rules and taking into account that wave B should retrace 50% of wave A, we can define the potential targets with measuring wave A with take profit at 0.9208 (50% of wave A). To reduce the risk, we can use invalidation point at the 0.9567 level as stop loss.

Support and Resistance
(S3) 0.9457, (S2) 0.9477, (S1) 0.9515, (PP) 0.9535, (R1) 0.9573, (R2) 0.9593, (R3) 0.9631.

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movements. That is why short positions at the level of 0.9500 with stop loss at 0.9567 and take profit at 0.9208 are recommended.