Tomorrow RBA will make a decision regarding interest rates. Market does not expect any changes for now which could be supportive for AUD if policy will remain as it is. In fact, a technical side of this pair is also predicting bullish waves as decline from 0.9527 has a corrective look; a three wave decline with possible ending diagonal placed in wave C. Nice support zone for a completion of the pattern is at 0.9280/50. We will wait on a five wave rally and then ready to pull a trigger on the long side of the pair. For now its too soon! On the other-hand, any surprise from the RBA with rate cut will send AUDUSD sharply lower and then invalidate our count.
AUDUSD 1h Elliott Wave Analysis
Good to Know!
Elliott’s pattern consists of motive waves and corrective waves. A motive wave is composed of five subwaves and always moves in the same direction as the trend of the next larger size. A corrective wave is divided into three subwaves. It moves against the trend of the next larger size.
On the basic chart below we can see a zigzag which a most common wave pattern that unfold in 3 legs, labeled A-B-C, generally moving counter to the larger trend.
- Structure is 5-3-5
- wave A must be a motive wave
- wave B can only be a corrective pattern
- wave B must be shorter than wave A by price distance
- wave C must be a motive wave.
- appears in wave two or four in an impulse, wave B in an A-B-C, wave X in a double or triple zig-zag, or wave Y in a triple threes