FX.co ★ AUD/USD analysis for October 18, 2013

AUD/USD Elliott Wave
From the beginning of the week the AUDUSD pair has been trading upwards, corrective wave (w) (coloured green) of the final [y] wave (coloured black) has been developing. Yesterday, during the Asian and European sessions, we could observe ascending movement from 0.9526 towards the 0.9600 level. Therefore, during the early New York session this major currency continued trading in a bullish mood and the price reached a new high at the 0.9645 level. At the moment, the USDCAD pair is trading around the 0.9635 level, and we are expecting to see continuation of the bullish movements today. In accordance with our wave rules and taking into account that wave y should retrace 100% of wave w, we can define the potential targets with measuring wave w with take profit at 0.9955 (100% of wave w). To reduce the risk, we can use invalidation point at the 0.9520 level as stop loss.

Support and Resistance
(S3) 0.9438, (S2) 0.9482, (S1) 0.9558, (PP) 0.9602, (R1) 0.9678, (R2) 0.9722, (R3) 0.9798.

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin upward movements. That is why long positions at the level of 0.9700 with stop loss at 0.9520 and take profit at 0.9955 are recommended.