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AUD/USD trade plan – Elliott Wave Analysis

AUDUSD found support last week and rallied back above the 0.9400 area where we see a 61.8% Fibonacci retracement level. This is the most important level for a corrective wave B or wave 2.

We can see that market has turned nicely down from that region in the last two trading days, following Friday’s NFP miss. The fall is strong and impulsive so we believe that a contra-trend move is complete and that the market is heading south.   We expect a drop into wave C or wave 3, which is not important at these stages as minimum downside levels suggest a drop to the 0.9070-0.9120 area as long as the 0.9400 is invalidation level will hold.

audusd 4 hour chart Elliott Wave analysis trade plan for currency trading Australian dollar USD

However, before a downtrend may continue and even accelerate we may see some pullback on the intraday basis. We are looking at 0.9300 followed by 0.9340 as potential limited upside for the current intraday correction that we already see it unfolding.

audusd 1 hour chart Elliott Wave analysis trade plan for currency trading Australian dollar USD

Trade plan:

Short AUDUSD with 50% at 0.9295 and add 50% at 0.9335 with stops at 0.9400 and target at 0.9100.

Pull stops to break even if orders filled and if 0.9230 is broken.

Cancel unfilled orders when 0.9230 is taken out.

Gregor Horvat

Gregor Horvat

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!