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Markets are slightly in the risk-on mode after good Chinese trade balance numbers. As it usually happens, AUD will be impacted the most on any news from China, so the currency found support in Asian trading and is now one of the strongest on the day despite the fact that employment figures reported in Australia came out worse than expected (-10.2K vs. +6.2K exp.).

Technically speaking AUDUSD still has only three legs up on the hourly chart and we know it’s a structure of a corrective, contra-trend price action. We also should not be ignoring the larger bearish trend evident on the weekly or daily level.

As such, we are ready for AUD weakness, but need some confirmation from the market first. We are talking about a possible impulsive decline from the current levels and back to 0.8970 or even lower.

If we get this type of fall then the bearish bias will be confirmed and we would be interested to go short AUD against the USD. If we don’t get five waves down in the near-future then we obviously it’s better to stay aside on AUD.

aud aug 08 2013 1h Elliott Wave Analysis technical currency trading