FX.co ★ AUD/USD analysis for May 08, 2013

AUD/USD Elliott Wave
Since our last analysis the AUD/USD pair has continued trading in a bearish mood, just like we expected, impulsive sub-wave 3 (coloured purple) of the bigger wave (3) (coloured green) has been developing. Yesterday, during the Asian and European sessions we could observe strong descending movement from 1.0254 towards the 1.0187 level, that confirms wave 3. Therefore, during the New York session this major currency has continued to trade lower and the price has reached a new low at 1.0154 level. We can consider this move as the end of the impulsive wave 3 (coloured purple). At the moment the AUD/USD pair is trading around 1.0182 and we expect to see the price lower in the next few sessions. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the waves 1, we can define the potential targets with measuring wave 1 with take profit at 1.0095 (161.8 % of wave 1). To reduce the risk, we can use resistance at 1.0250 as stop loss.
Support and Resistance
(S3) 1.0041 (S2) 1.0098 (S1) 1.0140 (PP) 1.0197 (R1) 1.0239 (R2) 1.0296 (R3) 1.0338
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 1.0160 with stop loss at 1.0250 and take profit at 1.0095 are recommended.