Thursday, October 29, 2015

AudNzd: Upward Trend To Resume?

The bearish trend from 2011 was a clear impulse wave.

According to elliot wave theory, a 3-wave correction often follows a 5-wave trend. These corrections have different patterns; one of which is the zigzag pattern.

The 5-wave impulse in Audnzd ended and immediately started the 3-wave correction in April 2015.

The first wave  (wave A in red) of the correction is also a clear impulse wave which makes us believe that the expected corrective pattern could be a zigzag pattern. The B wave (in red) which is the second wave of this correction is a clear corrective (zigzag) pattern .

The chart below shows the building waves of the probable correction in the weekly chart above.

This pattern could be about to complete as price will be expected to rally in a 5-wave motive wave to go above the high of the A'wave (1.164) and to 1.21755.

The B'wave ( in red) is a clear zigzag pattern and its last wave, wave (c) is a clear impulse wave terminating with a probable ending diagonal shown clearly below by the falling trendlines.

Price could trace down a bit before rallying to break the upper trendline upside. This will be a trading opportunity to buy this pair with a good risk/reward ratio.

There could be a trading opportunity to ride wave C to 1.21755

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