AUD/USD Elliott Wave
The AUD/USD pair continued trading higher on Friday, corrective wave b (coloured black) of the bigger wave (iv) (coloured blue) was developing. We can see in the 30-minute chart that the USD/CAD pair has support at the 0.8921 level and from there the price has reached a new highs around the 0.9000 region. While this commodity currency stays below 0.9020, we are going to look for the one more move lower to 0.8870, where we can look to establish long positions against the 0.8800 level. In accordance with our wave rules and taking into account that wave 5 should retrace 161.8% of wave 4, we can define potential targets with measuring wave 4 with take profit at 0.8917 (161.8% of wave 4). The RSI indicator is still showing divergence and if this divergence gets erased, we are going to switch to our alternate count.
Alternate count: The impulsive wave [i] (coloured green), already has 5 completed sub-waves at the 0.8997 level, if this count takes place, we are going to see a deeper correction towards 0.8836-0.8803, before the price turns higher again. Invalidation for the alternate count will be a break below the 0.8695 level.
Support and Resistance
(S3) 0.8877, (S2) 0.8904, (S1) 0.8921, (PP) 0.8949, (R1) 0.8976, (R2) 0.8993, (R3) 0.9021.
Trading forecast
Proceeding from Elliot Wave rules today, the trend is expected to begin the upward movements. That is why long positions at the level of 0.8870/60 with stop loss at 0.8800 and take profit at 0.8917 are recommended.