Forex Technical Update August 3, 2010
 AUD/USD's Bullish Impulse Wave Scenario; Elliott Wave Count
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  • Daily: The AUD/USD has been bullish, and I have 1 possible Elliott Wave count that seems to be developing correctly.
  • First, I want to start with the Moving averages, as they have crossed, and confirmed.
  • Also, the RSI has broken above 60, and even 70, then failed to sustain a break below 40, also indicative of bullish momentum.
  • I have included alternative channel possibilities (some analysts use the first bottom of a double bottom as the starting point). I try to see it both ways at the same time.
  • If I am right that the market started an impulse wave on June 7, we are in wave 3. (Note, forgive me for not using conventional ways to label different degree of waves.) You should understand regardless, the count if you understand Elliott Wave Principles. Otherwise, I would love to explain if you email me at fyang@fxtimes.com.
  • Looking at the internals, the 0.8850 area seems to be shared as the end of wave 1, (1), and i. That means, the current short-term decline should not go below this level for this count to be valid.
  • Then a rally from there would be terminal wave 5. If projected as an equality of wave 1, the target is 0.9450.
  • The 2009, and 2010 high was at 0.9400, so this may be a bit over-aggressive of a target.
  • In any case, I suspect the topping action and reversal action in the near-term is a correction, and further rally is to follow.
  • Note: in the 1H chart, there is a positive reversal signal, so we may not even see a decline to 0.8850 before a rally towards 0.94.

  Fan Yang
Currency Analyst
Commodity Trading Advisor

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