FX.co ★ EUR/AUD analysis for January 24, 2013

EUR/AUD Elliott Wave
For the last few days the EUR/AUD pair is trading sideways, corrective (4) wave (coloured green) is in the progress. If we take a look at the 45-minutes chart we can see that waves A, B, C, and D (coloured blue) are finished and we got one more wave to go to complete this triangle formation. In accordance with our wave rules and taking into account that wave E should retrace 61.8% of wave C, we can define the potential targets with measuring wave C with take profit at 7.2575 (61.8% of wave C). To reduce the risk, we can use invalidation at 1.2717 level as stop loss.

Alternation: Corrective D wave (coloured blue) is not over and there is still room for the upwards move. In this case we should wait until D wave is over to enter a Short position for the final E wave (coloured blue).

Support and Resistance
(S3) 1.2553 (S2) 1.2578 (S1) 1.2593 (PP) 1.2617 (R1) 1.2617 (R2) 1.2657 (R3) 1.2681

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.2650 with stop loss 1.2717 and take profit at 1.2575 are recommended.