AUDUSD Expects to See More Upside Activity – Elliott wave analysis

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Hello traders!

On the 4h chart of AUDUSD we can see market trading in a bullish price move, commonly named an impulse. An impulse is a five-wave move, that trades in the direction of the stronger trend (in our case to the upside). That said, we know that nothing moves in straight lines, which means that after a 1-2-3-4-5 move develops, a temporary A-B-C correction follows. 

On our chart we see the price now trading out of a triangle correction, which was located in wave 4), and into a wave 5), that can target 0.738 possible resistance area or higher resistance at the 0.744 level. That said, once wave 5) unfolds, and we see price in a new impulsive drop, also below the 0.726 level, that is when an A)-B)-C) correction can be underway and bulls temporarily on hold. 

AUDUSD, 4h

Now let us look at USDCNH, the market, which is negatively correlated to the AUDUSD.

USDCNH completed a big A)-B)-C) correction in 2020, and started declining impulsively, down from 7.19 high. This impulsive fall suggests more upside on the AUDUSD in the long-term, however, on the near-term we still need to be aware of temporary pullbacks, as expected on AUDUSD 4h chart. 

USDCNH, weekly

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About Author

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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