FX.co ★ AUD/USD analysis for March 4, 2013

AUD/USD Elliott Wave
For the last few days the AUD/USD pair was trading downwards, impulsive wave (3) (coloured pink) of the bigger wave 3 (coloured blue) was developing. During the Friday's European session we could observe slight descending movement from 1.0241 towards the 1.0181 level. Therefore, during the New York session this currency did not manage to hold this level and the price retraced back to 1.0216 level. Today, during the Asian session the AUD/USD pair aggressively dropped to the 1.0116 level and this bearish move confirmed our count, so we expect to see the price below 0.9960 level in the next few sessions. In accordance with our wave rules and taking into account that the wave 3 should retrace 261.8% of the waves 1, we can define the potential targets with measuring wave 1 with take profit at 0.9957 (261.8% of wave 1). To reduce the risk, we can use invalidation at 1.0182 level (end of 1 wave) as stop loss.

Support and Resistance
(S3) 1.0148 (S2) 1.0171 (S1) 1.0185 (PP) 1.0208 (R1) 1.0231 (R2) 1.0245 (R3) 1.0268

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.0121 with stop loss at 1.0182 and take profit at 0.9957 are recommended.