AUDUSD has turned down from 0.7834 high in May, after wave C-circled completed a big corrective wave IV flat pattern. A flat has a 3-3-5 sub-wave structure, so it was a contra-trend movement that should send the price back to the lows. So far, the market made a very good and strong bearish turn to 0.7130 with a clearly impulsive personality, thus we believe that the big black wave V is underway. That been said, we are looking lower as long as 0.7834 holds, so the bounce is most-likely only a corrective wave two that can be near completion as the three sub-waves are already visible.
AUDUSD, Daily
On the lower time frame, the Aussie has been trading higher last week, towards 78.6% Fibonacci retracement level that turned into a resistance based on recent 100 pip sell-off shown on the 4h chart. So we see the first evidence that the market has accomplished a deep corrective rally since the end of May. Also, it would be nice to see even more downside in the near-term, towards 0.7500 where the broken channel support line would put the market in a very strong bearish mode, possibly for 0.7140.
AUDUSD, 4H
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