Forex Technical Update July 20, 2010  AUD/USD Looking at a Near-term Decline, EW Count

  • 4H and 1H: Here is a look at the 4H and 1H chart. Below are daily and weekly charts. I want to anticipate the current count, and in the 4H chart, we can clearly see an impulse wave coming to an end, and therefore probably corrective waves to follow.
  • It appears we already had wave a, and wave b, and may be onto wave c.
  • 1H chart shows internals of b, and what would invalidate this count. Wave b should not be an impulse wave so if a rally (also an impulse type) goes above 0.8810 to form a wave (v) here in the internals, then this count is flawed, and anticipation of a c wave projection should be revised.
  • Otherwise, if c=a the target is just below 0.8600, 50% retracement level. This is also a confluence of SMA 200 in the 4H chart.

  • Weekly and Daily: The weekly offers a possible count. If the rally in 2009 was an impulse wave, then we may be in a correction. If we are in a correction, B wave may or may not be complete, and C wave is ahead looking at the 0.76 area.
  • Another count is that we are starting an impulse wave down, which makes that April downswing I, and the subsequent rally II. Whether II has completed is not resolved, since the rally has stopped, but has not shown reversal.
  • Then a wave III can be projected even further below the projected C.
  • In the daily, there is a threshold for the current rally before we have to invalidate both scenarios. If the market breaks above 0.91 (78.6% retracement), we may have a rally to test the 0.94 area.
  •   Fan Yang Currency Analyst Commodity Trading Advisor

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