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Sanmi Adeagbo

19 May 2017


19 May AUD USD Elliott wave analysis: 900 Pips bullish setup?


The Aussie was on a big bearish trend from 2011 to 2015 before price started a bullish correction in January 2016. The rally from 2016 is corrective and tells that the bearish will only continue once the correction is over. What information does this long term forecast give us? Is the correction over yet? The following gives clues based on 19 May AUD USD Elliott wave analysis.

19 MayAtoZForex - The Aussie began a bearish correction in January 2016 and price has been looking sideways since then from a long term perspective. Trends, according to Elliott wave theory often exhibit the structures of a motive wave often time an impulse wave. Impulse waves are made up of 5 non-overlapping waves. AUDUSD has been exhibiting this structure since 2011 making us to have clues of what could happen in the coming months. The chart below shows the weekly Elliott wave analysis of the Aussie.

19 May AUD USD Elliott wave analysis AUDUSD Elliott wave analysis, Weekly

From the chart above, the first 3-wave of a prospective bearish trend since 2011 completed late 2015. A bearish wave 4 would soon follow since January 2016. In about 16 months, the bullish corrective wave (IV) has persisted. Often times the 4th wave of in impulse wave corrects to 38.2% Fib-retracement of the preceding 3rd wave of the same degree. This means that there is a likelihood that wave (IV) continues to 0.84 in the coming weeks. It is also very important to know the emerging wave (IV) pattern. The chart below shows that.

19 May AUD USD Elliott wave analysis AUDUSD Elliott wave analysis, Daily

Does the chart above look like a double zigzag about to complete the second leg - wave (Y)? Double zigzag patterns are made of two sub-zigzags at either end. The last end, wave (Y) has completed wave (b) at 0.73. A rally is very likely to break above 0.776 and 0.84. This forecast will be invalid if price breaks below 0.703. Will there be a bullish setup on the Aussie?. The chart below shows the sub-waves of wave (b).

19 May AUD USD Elliott wave analysis: bullish setup?

19 May AUD USD Elliott wave analysis AUDUSD Elliott wave analysis, H12

Wave (b) is a double zigzag pattern completed at a very important Fib-cluster level. A significant break above the channel will be significant for the for a rally above 0.776 to 0.84 to complete wave (IV). If price is contained ithin the channel and breaks below 0.73, there will be a need to wait for a bullish breakout. A break below 0.703 will invalidate this setup completely. More updates will come later.

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