The AUD/USD has been consolidating this week after sharp declines since the beginning of September. The wave count anticipated earlier in the week may be materializing as we see our first pullback towards parity in a leading triangle pattern. The 1H chart shows the AUD/USD then make an abc correction that was supported near the 0.97 level. The bounce then broke above the 0.9850 pivot, suggesting that the (b) wave is complete. Now, the anticipation is for a (c) wave to develop that might re-test and possibly break above the parity level toward 1.0100. The market should still have a medium term bearish outlook after this short-term recovery outlook, but if a rally pushes above 1.0100 (61.8% retracement), we may be in a deeper/longer recovery period. Otherwise, we can then develop a wave 5 toward but 0.94, noting possible above that near 0.9415.

Fan Yang CMT
Chief Technical Strategist