FX.co ★ AUD/USD analysis for December 06, 2013

AUD/USD Elliott Wave
Since our last analysis the AUD/USD pair has been trading slightly upwards, corrective wave .iv (coloured black) of the bigger wave c (coloured blue) has been developing. Yesterday, during the Asian and European session we could observe ascending movement from 0.9003 towards the 0.9055 level. Therefore, during the New York session this major currency has continued trading in a bullish mood and price has reached a new sessions high at 0.9074 level. We can consider this move as the end of the .iv wave (coloured black). At the moment, the AUD/USD pair is trading around 0.9050 and we are expecting to see one more push lower before C wave (coloured red) starts. In accordance with our wave rules and taking into account that wave 5 should retrace 161.8% of wave 4, we can define the potential targets with measuring wave 4 with take profit at 0.8950 (161.8% of wave 4). To reduce the risk, we can use invalidation point at 0.9130 level as stop loss.

Support and Resistance
(S3) 0.8943 (S2) 0.8973 (S1) 0.9017 (PP) 0.9047 (R1) 0.9091 (R2) 0.9121 (R3) 0.9165

Trading forecast
Proceeding from Elliot Wave rules today, the trend is expected to begin the downwards movements. That is why short position at level 0.9030 with stop loss at 0.9130 and take profit at 0.8962 are recommended.