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While other currencies lost some ground against the buck yesterday, the Australian dollar remained strong. The reason is economic data from this week, such as PPI (0.8) reported on Sunday, and CPI (0.9) that also beat expectations.

Looking at the technical side of this pair, the prices are acting very strong, and we expect this price action to continue in the future, as we are looking for a progress within a black wave 3. Notice that a recovery from 1.0560 is very strong, very typical price action of a wave three, which also broke through the upper side of a base channel, another evidence for a bullish continuation.

Guest post by Gregor Horvat

However, in the very near future (next session or two) we would not be surprised to see Aud/Usd reversing lower, but only temporary, into a minor correction, maybe towards 1.0950-70, before uptrend accelerates towards 1.12.

AUD USD Elliott Wave Analysis July 28 2011


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