FX.co ★ AUD/USD Wave Analysis for December 24, 2012

AUD/USD Elliott Wave
Last week the AUD/USD pair was trading in downtrend, impulsive wave 1 (coloured blue) of the bigger wave (1) (coloured green) was developing. During the Friday's Asian and European session we could observe descending movement from 1.0453 towards the 1.0410 level. Therefore, during the New York session this major currency continued trading in a bearish mood, and price reached a new low at level of 1.0386. We can consider this move as the end of the wave (5) (coloured pink) of the bigger wave 1 (coloured blue). At the moment the AUD/USD pair is trading around 1.0405 level and we expect to see higher price today. In accordance with our wave rules and taking into account that the wave 2 should retrace 61.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0491(61.8% of wave 1). To reduce the risk, we can use invalidation at 1.0386 level as stop loss.

Support and Resistance
(S3) 1.0279 (S2) 1.0336 (S1) 1.0371 (PP) 1.0428 (R1) 1.0463 (R2) 1.0520 (R3) 1.0555

Trading Forecast
According to the Elliott Wave rules, today the trend is expected to begin the upward movement. That is why long positions at 1.0415 with stop loss 1.0386 and take profit at 1.0491 are recommended.