FX.co ★ Elliott Wave Analysis of AUD/USD for February 04, 2014

AUD/USD Elliott Wave
The AUD/USD pair has been trading downward for more than a year, we are approaching some critical areas for long term trading at the moment and that's why we want to look for some long term trade in this pair today. In the 1-week chart, we can see that from the high at 1.1070 there is diagonal movements that we are labeling as FLAT correction inside the red wave (A) (coloured red). We can see that 50% of the previus wave (C) (coloured red) and 123.6% extensions of the C has really come close. That is why this area between 0.8738 and 0.8539 can be a really good support area and potential end of the (A) of [X]. When we see the break above the upper trend line from the chart, we can enter long position against the low at the 0.8300 level. 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 tase profit at 0.9660 (50% of wave A).

Support and Resistance
(S3) 0.8622, (S2) 0.8680, (S1) 0.8717, (PP) 0.8775, (R1) 0.8812, (R2) 0.8870, (R3) 0.8907.

Trading forecast
Proceeding from Elliot Wave rules today, the trend is expected to begin upward movements. That is why long position at level of 0.9000 with stop loss at 0.8300 take profit at 0.9660 are recommended.